AFS' Position on the Digital and AI Omnibus Proposals

Startups and scale-ups are the engines of Europe’s digital economy. They create jobs, bring innovative products to market, and compete on a global stage. Yet navigating the EU’s growing digital rulebook, covering AI, data, and cybersecurity, has become increasingly challenging. Multiple regulations, overlapping obligations, and fragmented guidance risk diverting time and resources away from innovation and growth.

Allied For Startups welcomes the European Commission’s Digital and AI Omnibus proposals as a step in the right direction. For the first time, the EU is shifting its focus from adding more rules to making rules work in practice. But simplification will only succeed if it delivers clarity, predictability, and proportionate obligations that reflect the realities of high-growth companies.

For AI, one of the biggest challenges for startups is timing and certainty. High-risk AI obligations are complex and often rely on guidance or standards that are not yet in place. Startups cannot be expected to comply with requirements that do not yet exist. Clear, fixed timelines for compliance are essential so that fast-growing companies can plan their development, invest wisely, and integrate safeguards into their products from the outset.

Another pressing issue is how startups are recognised in EU rules. Traditionally, policies use size-based SME definitions, which overlook the unique pressures of startups and scale-ups: rapid scaling, thin margins, limited compliance teams, and global competition. The AI Omnibus should explicitly acknowledge these high-growth companies, ensuring that simplifications, supervisory guidance, and support measures genuinely reflect their operational realities.

Bias mitigation and trustworthy AI also require a practical approach. Startups often need to process sensitive data to detect and correct bias in algorithms. Without a clear legal basis, they risk operating in a grey zone that could hinder investment in fairness and robustness. The AI Omnibus proposal create an opportunity to resolve this tension and allow responsible innovation to thrive.

Data, privacy, and cybersecurity frameworks must also be streamlined. Startups cannot afford fragmented GDPR interpretations or complex ePrivacy consent mechanisms that create new technical gatekeepers. Similarly, SaaS and infrastructure companies need clarity around data access, switching, and contractual obligations to maintain sustainable business models. Regarding cybersecurity, simplified reporting through a single EU entry point would allow young companies to respond to incidents without being overwhelmed by administrative burdens.

A coherent, predictable, and startup-friendly digital framework is not just a regulatory improvement, it is an investment in Europe’s digital future. When startups can navigate rules with confidence, they are better equipped to scale internationally, attract funding, and deliver new technologies. Simplification is not an abstract goal; it is essential for ensuring Europe remains a competitive, resilient, and innovation-driven digital economy.