Europe’s procurement rules fail to curb tax-avoiding tech giants

Palantir, which holds at least €782 million in UK government contracts, reported a global effective tax rate of just 1.4 percent on €1.43 billion in pre-tax profits for 2025. Data from CICTAR reveals a €12 million tax gap in Europe alone, highlighting a systemic issue where major contractors—including Microsoft, Amazon, and Accenture—prioritize tax minimization while feeding off public coffers. The current EU legislative draft threatens to exacerbate this by removing provisions that allow authorities to exclude companies engaged in aggressive tax avoidance.

Beyond fiscal responsibility, the reliance on external providers for critical infrastructure poses a threat to digital sovereignty. France, the Netherlands, and Switzerland have already begun distancing themselves from Palantir, citing concerns over data control and strategic dependence. If the European Commission intends to leverage its massive purchasing power effectively, it must shift away from price-obsessed bidding toward a model that mandates tax transparency, defends in-house public provision, and prioritizes long-term democratic control over sensitive digital services.