What the Netherlands Authority for Consumers and Markets (ACM). the takeover of the originally Dutch company Solvinity by the American IT group Kyndryl can go ahead. Solvinity is now largely owned by British investors. The competitive situation does not change much when it is sold by them. The parties’ market share does not exceed 15 percent.
The takeover of Solvinity by Kyndryl is controversial. This is because Solvinity manages many applications for the government, both within the justice chain and the DigiD login application. A majority in the House of Representatives wants the takeover to be stopped, because the American government could gain access to confidential data via Kyndryl and there are conceivable scenarios in which the American government would sabotage DigiD.
For the assessment of that risk, the opinion of another independent supervisor is more important. The Investment Assessment Bureau (BTI) tests against the telecom law and focuses on whether vital digital infrastructure becomes less secure as a result of the takeover. Ultimately, the Minister of Economic Affairs must decide – with both assessments in hand.
The ACM specifically examined whether this acquisition would restrict competition in the Dutch market for IT services. That’s not true. This does not mean that the ACM does not see any problems in the IT market. The regulator warns that in practice, customers find it difficult to switch IT service providers, especially if they supply specific applications. That will be ‘vendor lock in’ named.
Customers could reduce their dependency by requesting less customization, splitting orders among different providers and building exit strategies into the contract so that they can quickly switch, the ACM recommends.
Rob Bravenboer, Managing Director of Kyndryl Netherlands, responds enthusiastically to the ACM decision through a spokesperson. “Kyndryl Netherlands is committed to strengthening and making the Dutch digital landscape safer.” According to Bravenboer, the investment ‘supports local talent’. And brings that together with the experience that Kyndryl brings because the company is active globally.
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