Will France support startups during its Presidency?

January 5, 2022

For the last few years the French government has shown considerable interest in nurturing its fast-growing digital startup ecosystem and becoming a “Digital Republic”. Just last year, the government invested €4 billion in funding for startups to support them during the COVID lockdowns. France is also known for its startup visa, a fast-track scheme for non-EU startup employees, founders and investors to obtain a residence permit for France. This has benefitted countless startups – and it shows! During Emmanuel Macron’s Presidency the number of startups in the French ecosystem has more than tripled.

As France takes over the 6-month Presidency of the Council of the EU from 1st January, we want to deep-dive into some of France’s digital policy priorities that matter for startups – the Digital Markets Act and the Digital Services Act. Will France continue to support startups through European legislation?  

The top priority for French President Macron is the Digital Markets Act (DMA). Released a year ago, the regulation proposal that aims to create fair and competitive digital markets moved fast through the institutions in 2021. The European Parliament and the Member States in the Council will start trialogues at the beginning of 2022. Chances are that the file will be closed before the end of the Presidency. Startups need the DMA to work so that it can enable them to become the tech champions of tomorrow. To do so, it will be important to avoid negative unintended consequences for startup ecosystems and clarify the scope and enforcement of the instrument.

President Macron also wants to wrap up negotiations on the Digital Services Act (DSA). Released at the same time as the DMA, the DSA has been targeted by several national delegations and policy makers to include specific issues such as specific regimes and obligations for online marketplaces, going against the spirit of creating horizontal legislation. The Council adopted its general approach on 25 November and the Parliament will finalise its position in January. The political will to finalise the text before the end of the Presidency should not impact the quality and objectives of the proposal. The French Presidency will be a great opportunity to have an evidence-based discussion on the role of the Country of Origin principle for the growth of startups in Europe (see graph above). Startups need an updated, proportionate and future-proof DSA that will give them legal certainty.

Both legislative files are top priorities for startups and key to the future of the platform economy in Europe. It is crucial that both of these pieces of legislation, when negotiated in trilogues, are thought through the lens of the 10,000 platform entrepreneurs in Europe. Getting the right regulatory framework in the DMA and clear and proportionate rules in the DSA will be key to ensure that startups have the legal certainty and the flexibility to launch and scale their businesses across the EU. If done right, these two legislations in addition to other measures the French government has taken to support startups, have the potential to make a big step in completing the Digital Single Market and create a strong and competitive environment for startups to thrive in!