The Dutch Association of Municipalities (VNG)’s March 2025 position paper¹ makes the social & economic case for Dutch city authorities to use AI. Their approach is interesting - practical, ethical and wise. I’m grateful to John van Dijk for pointing me to it.
The paper is pragmatic: first, it says, make sure the use of AI really adds value. Second, it takes an ethical approach: make sure AI aligns to social values such as privacy and security. Third, it is wise – it considers system-wide effects. Authorities should address the risks of concentrated supply and lock-in:
"Dependency on a few large suppliers must be avoided by means of strong supplier management and effective procurement conditions."
The risks of becoming dependent on a few large market players is real. The EU formally designates seven companies as key ‘gatekeepers’ in the European IT market: six owned by US, and one by Chinese companies. Five of these provide leading AI engines and hosting services¹. For Europe, as for any economic bloc, dependency on external parties generates defensive security risks and strategic economic risks.
In its paper, the VNG highlights the practical and ethical requirements that each municipal authority should set. Each should insist on clarity in contracting; ongoing audits; commitments to accessibility, privacy, data security, ethical development, and non-discriminatory use of AI. Individual municipalities, like Amsterdam in February 2025, have used these reasons to block some AI suppliers.²
The VNG also addresses the third point: the risk of becoming prey to natural monopolies. Dutch and European municipalities and government bodies should collaborate to address these risks by setting standards. Just as in banking or telecommunications, users should retain ownership of their data. Even before regulation is put in place, purchasers should consistently demand access to the AI data assets they build up, so that their organisations can more easily move to different providers.
“AI solutions should be reusable so that municipalities are more efficient and sustainable; ...
based on open standards and interoperability. This prevents municipalities from become dependent on one party and ensures that that solutions can be used more widely.”
Critically, to make this happen, the city authorities have to take a single, agreed approach.
“It is wise for municipalities to face these challenges together, not independently. ...This is about collective challenges. Municipalities can present a joint face to the market.”… “All this within a playing field in which the balance between (large American) market parties and the local government is completely lost.”
“It is about large (national) issues such as Dutch/European language models, data infrastructure, innovation ecosystems with scaling-up possibilities ... Municipalities cannot (nor must) tackle these issues alone. Collectively we can do, and want to do, more.”
In this third area, the VNG suggests key risks can only be addressed by national & EU-level collective action. Whole industry associations need to think now about how to keep their members from being locked in to providers that will extract large amounts of value. If action is not taken, this will happen. Directors of the giant shareholder-owned AI platforms consistently receive advice that their professional duty of care is to maximise profits. To combat this, regulators and national bodies like the VNG have a duty of care to shape the market so that it works for the customers too.³
When this works badly, you can see monopolistic platforms like Linkedin, Google, Amazon, YouTube or WhatsApp increasing the frequency of adverts, providing services that compete with other suppliers and extracting value by targeting your profile. Competition authorities already struggle to keep up; imagine the speed and reach multiplied into every area of government action and professional services.
There is an interesting comparison in a very different market. Early in the 1900s, Sweden, Finland and Norway decided they wanted to reduce harm caused by dependency on alcohol. They set up state alcohol shops to be run as a service to customers, not to extract as much profit as possible. The result, even a hundred years later, seems to work. Apart from the taxes, there are lower prices – due to collective purchasing – less encouragement for drinking and less damage to health.⁴
It doesn’t have to be a state monopoly. Other interventions are possible too, from ensuring interoperability to steward ownership.⁵ Modern economies are about to become very dependent on AI services. A large amount of value could potentially be extracted from Europe. Should AI also be provided in some similarly sober way?
___________________________________________________________________
¹ Link to Dutch version here
² Microsoft-OpenAI, Meta-Llama, Alphabet-Gemini, Amazon-Nova&Claude, Apple-SiriAI
³ https://www.security.nl/posting/877833/
⁴ The same argument applies to national professional associations such as Law Associations, which should insist that they will only approve AI-solutions built to standards including client independence
⁵ Norway and Sweden are in the bottom 20% of European countries for deaths caused by alcohol. https://www.worldlifeexpectancy.com/cause-of-death/alcohol/by-country
“We avoid advertising so that you don't buy more than you intended or are lured into the store... The purchasing conditions are the same for all suppliers and we sell alcohol on a non-profit basis.” https://www.systembolaget.se/
⁶ https://wearestewards.nl/en/what-is-steward-ownership/