January 13, 2026 Cloudflare’s standoff with Italy has escalated from a regulatory dispute into a high-stakes showdown. The company is now threatening to pull out of Italy after the country’s communications regulator hit the company with a multimillion-euro fine over alleged failures to comply with anti-piracy orders.
The dispute centers on Italy’s Piracy Shield system, an automated blocking regime that requires internet infrastructure providers to restrict access to websites and IP addresses accused of facilitating copyright infringement. Italy’s regulator, the Autorità per le Garanzie nelle Comunicazioni (AGCOM), said this month that Cloudflare failed to comply with its directives and fined the company the equivalent of one percent of its annual global revenue, or just over €14 million.
That penalty exceeds Cloudflare’s total revenue from Italy and has triggered an unusually public backlash from CEO Matthew Prince. In a series of posts on X on Friday, Prince accused AGCOM of operating “a scheme to censor the Internet” without adequate legal safeguards.
Italy’s Piracy Shield allows copyright holders — most prominently Serie A and Serie B football leagues — to submit blocking requests to AGCOM. Once approved, internet service providers and infrastructure companies are required to block associated IP addresses and stop resolving domain names, often within 30 minutes.
Rights holders argue the system is necessary to curb illegal sports streaming that undermines broadcast revenue. Cloudflare and several independent researchers have countered that the system is overly blunt. Because modern internet infrastructure relies heavily on shared IP addresses and DNS services, blocking a single address can inadvertently take down unrelated websites and services. Network address translation and shared hosting mean that hundreds of users or multiple domains can be tied to the same IP.
Prince said Cloudflare plans to appeal the fine, but warned that the company is also weighing more drastic steps. In his post, he outlined potential responses that include discontinuing “the millions of dollars in pro bono cyber security services we are providing the upcoming Milano-Cortina Olympics.” He also mentioned ending free Cloudflare services for Italian users, removing servers from the country and scrapping plans to invest further in Italy.
The Winter Olympics are set to begin on February 6. Prince said he would alert the International Olympic Committee to what he described as “the risk to the Olympic Games.”
He also said he plans to raise the issue with U.S. officials, framing the dispute as both a trade issue and a free-speech concern. While acknowledging Italy’s right to regulate within its borders, Prince argued that those regulations should not require companies to enforce blocks beyond national boundaries.
Italian officials have sought to cool tensions. Senator Claudio Borghi said AGCOM operates independently and that the fine is not a political decision, but added that lawmakers would review the situation to determine whether there had been a misunderstanding.
Cloudflare, for its part, says it is open to talks.
