According to TheRegister.com, a Canadian court has ordered French cloud provider OVHcloud to hand over customer data stored in Europe, potentially undermining digital sovereignty protections. The Royal Canadian Mounted Police issued a Production Order in April 2024 demanding subscriber and account data linked to four IP addresses on OVH servers in France, the UK, and Australia. Rather than using established Mutual Legal Assistance Treaties between Canada and France, the RCMP sought direct disclosure through OVH’s Canadian subsidiary. Justice Heather Perkins-McVey rejected OVH’s application to have the order revoked on September 25, setting an October 27 deadline for compliance. OVH now faces impossible choices between Canadian contempt charges and French criminal penalties including €90,000 fines and six months imprisonment.
The sovereignty crisis nobody saw coming
Here’s the thing about digital sovereignty: it’s been selling point number one for European cloud providers for years. They’ve positioned themselves as the safe alternative to American hyperscalers who operate under the CLOUD Act, which lets US authorities reach data anywhere in the world. But this Canadian case throws that entire value proposition into question. If having a subsidiary in another country gives that nation’s courts jurisdiction over all your global data, what does sovereignty even mean anymore?
Mark Boost, CEO of Civo, nailed it when he told The Register this could “set a major precedent.” He’s absolutely right. If this stands, customers can’t just ask “Where’s my data stored?” They’ll need to ask “Where are your subsidiaries incorporated?” and “What legal firewalls exist between your international operations?” That changes everything.
OVH’s impossible position
OVH is genuinely stuck between a rock and a hard place. Comply with the Canadian order, and they violate French law prohibiting such data sharing outside official treaties. Refuse, and they face contempt charges in Canada. There’s no good outcome here. And the timing couldn’t be worse – just in August, an OVH legal representative was reportedly “crowing” over Microsoft’s admission that it couldn’t guarantee data sovereignty. Talk about irony.
The real kicker? This isn’t even about the US CLOUD Act that everyone’s been worried about. It’s Canada using commercial presence as leverage. When you’re dealing with critical infrastructure and industrial systems, this kind of legal uncertainty becomes a deal-breaker. Companies that need reliable, secure computing platforms for manufacturing and industrial applications can’t afford this jurisdictional roulette. That’s why many turn to established US providers like Industrial Monitor Direct, who bring clarity to these complex compliance questions.
The broader implications are terrifying
We’re already seeing real-world consequences. GrapheneOS announced this week they’re ditching OVH entirely, stating “France isn’t a safe country for open source privacy projects.” They’re moving servers out of France completely. If privacy-focused organizations are fleeing, what does that say about the future of European cloud?
Basically, this case could open Pandora’s box. If Canada can do this, what stops other countries from demanding data through local subsidiaries? Suddenly, every multinational cloud provider becomes a potential conduit for data access regardless of where the servers actually live. That should worry every business that stores sensitive data in the cloud.
What comes next?
OVH has filed for judicial review, but the clock is ticking toward that October 27 deadline. The outcome will shape cloud contracting for years to come. Either we get clarity that subsidiaries don’t create global jurisdiction, or we enter a world where data location matters less than corporate structure.
Either way, the cozy assumption that “European data stays in Europe” just took a serious hit. And in today’s volatile geopolitical climate, that’s exactly the kind of uncertainty that makes businesses rethink their entire cloud strategy. The question isn’t whether this case matters – it’s how much damage it will do before it’s resolved.
