Digital Single Market in the European Parliament – in good hands?

May 11, 2016
Digital Single Market

As the Digital Single Market report winds its way through Parliament, we want to share our view how the Parliament can improve the DSM package in order to further benefit Europe’s startup economy. Allied for Startups fully supports the DSM strategy and wants to underscore the need for a speedy process which reduces fragmentation and focuses on scaling European companies for the future. We outlined our position ahead of the presentation of the communication in a letter sent to Vice President Ansip.

At a recent occasion, Vice President Ansip made specific comments on the potential of digital start ups to generate growth:

“[Startups] generate a huge amount of digital innovation, responding to business and consumer needs. Take the EU app economy: in 2013, it generated revenues of €17.5 billion, a figure expected to rise to some €60 billion by 2018. Its workforce is projected to increase from 1.8 million people employed today to reach 4.8 million over the same period. So this is only the start. Our smaller tech companies could urgently do with some help: fewer obstacles, and more freedom to innovate and scale up in Europe. They need to be able to take full advantage of their potential. They need a flexible and supportive business environment – to grow fast and across borders; to test ideas and not be punished for having tried.”

Reading through the amendments that have been tabled in the Parliament and will soon be voted, these three thoughts come to mind:

Keep it simple

When it comes to regulating the digital economy, over-complicated or convoluted rules can have an outsized impact on startups who vary significantly in size and sophistication across the European Union. We want our startup entrepreneurs to have the time to focus on growing and innovating their core-business. It is for this reason that we urge the rapporteurs to support amendments which seek to simplify and streamline the Digital Single Market proposals in order to make them more flexible and workable for start ups across the continent. We need more engineers to start working at our companies, instead of lawyers. For startups to be able to compete successfully on a global connected marketplace scale is of the essence. Rigid and inflexible rules force startups to move and scale outside the EU.

BoostEuropean startups

We welcome the support contained in both the original draft and in many subsequent amendments supporting an open, free and expressive online environment which protect online intermediaries, many of whom operate in the startup space, from excessive and unfair liability for content hosted or listed on their services. This will require some tough choices that may upend some existing business models, but regulations should always be about protecting consumers from harms, not incumbents from competition.

Startups are platforms too

Finally, we would like to state our support to those MEPs that highlighted the difficulties for startups in creating a so-called “general platform regulation”. We believe that any such proposal could have a disproportionate impact on startups many of whom are small and medium businesses operating in dynamic and multi sided markets. We believe instead in tackling issues on a case-by-case basis making full us of self-regulatory and co-regulatory tools where necessary and appropriate.