Microsoft finalizes its EU sovereign cloud project

Core Points - Microsoft has completed a multi-year project enabling Europe-based customers to store and process data within the EU [1][2] - The project, named the EU Data Boundary for the Microsoft Cloud, started in January 2023 and concluded in February 2024 [2] - This initiative allows European customers to utilize Microsoft core cloud services, including Microsoft 365, Dynamics 365, Power Platform, and most Azure services, while ensuring compliance with local data protection laws [2][3] Data Residency and Compliance - The EU Data Boundary helps customers comply with European privacy regulations such as GDPR and Germany's Federal Data Protection Act [3] - Data residency refers to both the physical location of data and the local legal requirements governing that data [3] - For services supported by the EU Data Boundary, customer data and pseudonymized personal data are stored in datacenters located in the EU or EFTA [4] Regulatory Context - EU regulators have raised concerns regarding Microsoft's data processing practices, particularly about the legal basis for data processing and contract clarity [5] - In May 2023, Meta was fined $1.3 billion by Ireland's data privacy authority for similar issues related to data transfers to the U.S. [5] - A new "Data Privacy Framework" was established between the EU and U.S. in July 2023, allowing data transfers under specific privacy protections, yet Microsoft opted to keep all European cloud customers' personal data within the EU [6]