Microsoft has reached a significant milestone in its efforts to enhance data sovereignty in Europe. The company has completed its EU Data Boundary for the Microsoft Cloud project, a multi-year initiative designed to ensure that customers in the European Union (EU) and European Free Trade Association (EFTA) regions can store and process their data entirely within Europe.
The project began in January, 2023, and was driven by increasing regulatory scrutiny and growing customer demand for greater control over data residency. By finalizing this initiative, Microsoft strengthens its position in the European cloud market, aligning with strict local privacy laws such as the General Data Protection Regulation (GDPR), Germany’s Federal Data Protection Act, and the UK’s data protection regulations.
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A Major Step Toward Data Sovereignty
With the completion of the EU Data Boundary for the Microsoft Cloud, European customers can now ensure that their data remains within the EU and EFTA regions when using Microsoft 365, Dynamics 365, Power Platform, and most Azure services.
This initiative is part of a broader trend among major cloud providers, introducing localized data residency programs to comply with European data protection laws. As organizations become increasingly aware of data sovereignty issues, Microsoft’s move provides additional security and transparency for businesses and institutions operating in the region.
According to Microsoft, customer data and “pseudonymized” personal data for supported cloud services will now be stored and processed exclusively in EU- or EFTA-based data centers. However, some professional services data, including specific log files, will be stored at rest. For certain Azure services, customers may need to secure additional professional services and data storage commitments to ensure full compliance with the new boundary.
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Regulatory Pressures and Privacy Commitments
Microsoft’s move comes in response to ongoing scrutiny from EU regulators regarding how the company processes user data. Authorities have previously raised concerns about the legal basis for data processing and the clarity of Microsoft’s cloud service contracts.
Microsoft is not the only tech giant facing pressure. In May, 2023, Meta was fined USD 1.3 billion by Ireland’s data privacy watchdog for violating EU data transfer rules by moving European user data to the U.S. Similarly, concerns over cross-border data transfers have led European regulators to demand greater transparency and compliance from all cloud providers.
In July, 2023, the EU and U.S. established a new Data Privacy Framework, allowing data transfers between the two regions under specific privacy guarantees. However, Microsoft has chosen to go beyond these agreements, committing to keeping all European cloud customers’ personal data within the EU—a decision that reinforces its long-term strategy of prioritizing data residency and regulatory alignment.
With the completion of the EU Data Boundary project, Microsoft strengthens its compliance with European data protection laws, offering its customers increased control, security, and trust in its cloud services.
