NETHERLANDS Trends and Developments Contributed by: Herald Jongen, Maarten de Boorder, Samuel Garcia Nelen and Jelmer Kalisvaart, Greenberg Traurig, LLP
Regulatory influence on data centre transactions
tices to address ESG challenges, including the energy transition. This shift in focus has created opportunities for tech investors – and their port- folio companies – that provide solutions aligned with ESG principles, driving M&A activity in this space. The need for technological innovation grows with the increased urgency of climate action, fuelling investments in clean-tech com- panies. With the Netherlands’ commitment to sustain- ability, recent legislation emphasises energy efficiency in data centre operations. The gov- ernment has set ambitious targets for reducing greenhouse gas emissions, impacting how data centres are built and operated. Legal requirements increasingly mandate the use of renewable energy sources and the implementation of energy-efficient technologies. Acquirers must evaluate whether the target data centre meets these sustainability criteria during the M&A due diligence process. Data protection and privacy compliance The GDPR has a significant impact on how data centres handle personal data. Companies acquiring data centres must ensure that they comply with GDPR requirements related to data storage, processing and transfer. The Nether- lands applies a pragmatic, risk-based approach to the GDPR, which means that no single issue or risk leads to non-compliance. A good exam- ple is the memo on the US Cloud Act commis- sioned by the Ministry of Justice. This compliance necessitates thorough due diligence to ascertain how the target manages personal data, including its data handling prac- tices and security measures. Non-compliance can expose acquiring companies to substantial fines and legal liabilities.
The Dutch government has a positive view of the use of technology, the cloud and AI. There is a policy of storing government data in the cloud and a vision for the use of AI. In general, even confidential government data may be stored in the clouds of Microsoft and Amazon Web Ser- vices (AWS), with whom the government has signed framework agreements. AI is used by the government, reflecting the use of cloud services and AI by companies. The legal landscape concerning data centres in M&A is influenced by several key trends. These trends encompass regulatory compliance, envi- ronmental considerations and evolving data pro- tection laws, all of which are critical for compa- nies involved in data centre transactions. Regulatory framework and permitting The establishment and operation of data centres are subject to various local and national regula- tions, including zoning laws and environmental permits. The Dutch Environmental Protection Act ( Wet milieubeheer ) and other related regula- tions require that data centres comply with strict environmental standards, especially regarding energy consumption and emissions. Obtaining the necessary permits can be a lengthy process, often requiring comprehensive impact assessments. Companies looking to acquire data centres must ensure that the target complies with these permitting requirements, as non-compliance can lead to delays or fines. Sustainability and energy efficiency regulations The focus on ESG has penetrated business society, with companies increasingly looking to adopt sustainable technologies and prac-
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