Dutch government to stop ‘unwanted control’ of digital infra

The Dutch government has instigated a new law that would see it given greater control over which foreign investors invest in its digital infrastructure market.

The bill would allow the government to prohibit or reverse acquisitions in the sector by companies on the basis of either national security or public policy. This would include possible retroactive action and putting an end to existing controlling interests if new information comes to light about the companies regarding Dutch national security or public order.

“Netherlands benefits from the fact that we have an open economy in which the market is doing its job,” said Minister for Economic Affairs Henk Kamp. “So we take more business abroad than the other way about.

“Our country, however, has not benefited from takeovers by foreign companies that are linked to criminal activities, which are classified as financially vulnerable or have a non-transparent ownership structure. Given the national interests at stake, we lay a legal basis for the telecommunications sector in order to prevent such takeovers.”

Kamp clarified that the bill would apply to companies operating in telephony, internet and data centres, citing their importance to the safety and reliability of the national infrastructure. He hopes for the legislation to be enacted during the second quarter of this year.

The proposal of the bill comes just four weeks before the Dutch general election where latest polls indicate the ruling conservative party VVD is trailing the far-right Party for Freedom. The government’s Interior Minister Ronald Plasterk told parliament earlier this month the results would be counted manually amid “the vulnerabilities of the software” after he highlighted Russia as one of the “state actors” that could try to influence the election.

It also arrives just three months after Dutch telecoms firm KPN rejected a buyout offer from Belgian post operator Bpost. The company was embroiled in discussions over foreign ownership of infrastructure in 2013 when Mexican billionaire Carlos Slim attempted a €7.2 billion takeover before other shareholders moved to block the buyout. Kamp said at the time he was powerless to stop the acquisition and Slim remains a 21 percent shareholder.

Antin Infrastructure Partners, Infracapital and EQT have all made investments in Dutch digital infrastructure but did not respond to requests for comment by press time.