EU Regulation Could Stifle Digital Innovation

The latest from the Consumer Choice Center, who are concerned that digital regulation does not hamper innovation;

Today, the Consumer Choice Center Europe (CCCE) released survey results examining how EU data strategy regulations impact operations and innovation potential among startups in Central and Eastern Europe (CEE).

Representatives from startups across 11 CEE countries – Bulgaria, Romania, Slovenia, Croatia, Hungary, Slovakia, Czechia, Poland, Lithuania, Latvia, and Estonia—shared their insights and offered recommendations for both national and EU policymakers and regulators.

The survey assessed the effects of key regulations, including the General Data Protection Regulation (GDPR), Digital Services Act (DSA), Digital Markets Act (DMA), Data Act (DA), Data Governance Act (DGA), and Artificial Intelligence Act (AI Act).

Speaking on the survey results, Egle Markeviciute, Secretary and EU Affairs Manager at Consumer Choice Center Europe, said:

“The majority of Central Eastern European startups admitted they lack the resources and time to keep up with updates of the EU regulatory framework, let alone active participation in policymaking dialogue. Compliance with EU data strategy regulations has significantly impacted their operations, particularly in smaller startups. While most startups expressed positive attitudes towards national regulators, they nonetheless requested that these regulators enhance their operations to provide better internal coordination and quicker support for fast-moving startups.”

Many survey respondents discussed the future of data-driven startups in the EU, stating that the regulations are slowing the technological progress of EU companies. Others openly acknowledged that the future for data-driven companies in the EU remains uncertain due to the increasing regulatory burden.

CEE startups also highlighted the absence of a Single Digital Market as a significant burden. Combined with the complexity of EU regulations, this poses particular challenges for data-driven startups, which often lack the financial resources to manage compliance effectively.

“CEE startups remain realistic—they are prepared to comply with EU data strategy regulations and want the EU to succeed. However, they do not rule out relocating after scaling if the regulatory burden becomes too heavy. Many expressed a desire for EU and national policymakers to strike a better balance between ensuring data privacy and enabling technological growth at scale”, Markeviciute added.