The CLOUD Act allows U.S. law enforcement to compel U.S.-based tech companies (like Microsoft, Google, or AWS) to hand over data stored anywhere in the world. This overrides local privacy laws, creating a direct conflict with GDPR and exposing EU firms to unauthorized data disclosure.

European companies using U.S. cloud providers risk breaching GDPR if user data is accessed under the CLOUD Act without proper legal channels. Non-compliance can trigger lawsuits, loss of public trust, and fines under EU data protection regulations — even if the data never leaves Europe.

The CLOUD Act’s vague scope and lack of transparency mean European firms have limited visibility into how and when their data might be accessed. This unpredictability undermines compliance efforts and increases the need for sovereign infrastructure and trusted regional providers.