Tech-related ideas in von der Leyen’s political guidelines 2024-2029

Before the election, EU Commission President Ursula von der Leyen released 'Europe’s Choice: Political Guidelines for the European Union 2024-2029,' a document that blends ideas from the previous Commission's work, Enrico Letta's report, and some things European businesses have been pushing for.

After a rollercoaster of regulatory changes over the past five years, both the industry and public administrations across Europe are begging to focus on implementation, rather than new regulations. However, judging by the guidelines, this seems unlikely to become a reality. 

The EU’s power could be used as a force for good, driving necessary changes in politically sensitive areas, such as public procurement and the lack of innovative outcomes from academia. We can only hope that von der Leyen’s team didn’t address some of these ideas for election purposes and that they will be soon revisited. Instead of a tiresome hyperfocus on competing with the US, Europe could benefit from pivoting to the niche areas where it could truly excel if addressed properly.

The future of EU’s electronic communications 

“We need a new momentum to complete the Single Market in sectors like services, energy, defence, finance, electronic communications and digital. This will allow our companies – especially our small and medium-sized enterprises (SMEs) – to scale up and make the most of the market.”

The Single Market in electronic communications and SME scaling is briefly mentioned on the first page, but the actual plan remains unclear. The idea of reducing the number of mobile operators to create larger European players capable of greater investment and competing with the US tech giants is not new. Nor is the proposal to eventually allocate the upper band of 6GHz to international mobile telecommunications (IMT). 

The European electronic communications market, with its strong competitive edge, offers European consumers better services and lower prices compared to the US. But the big question is: will the EU sacrifice these advantages in an attempt to compete with US tech? And which countries' SMEs will have the chance to scale, and which will be forced to bow out?

Many smaller EU Member States have already voiced concerns about reducing the number of mobile operators, signaling that this will not be easy for the European Commission nor major European telecom companies.

European productivity

“Europe’s competitiveness is hamstrung by its lower productivity compared to its direct global competitors. Central to this is the insufficient diffusion of digital technologies, impacting our ability to use tech to develop new services and business models.

We will start by focusing on the implementation and enforcement of the digital laws adopted during the last mandate. Tech giants must assume responsibility for their enormous systemic power in our society and economy. We have begun the active enforcement of the Digital Services Act and the Digital Markets Act. We will ramp up and intensify our enforcement in the coming mandate”

Von der Leyen’s guidelines do a good job of tackling European competitiveness from various angles, like access to finance and cutting red tape (though it's sometimes hard not to sigh when seeing another layer of bureaucracy added in an attempt to cut it).

But there's also a heavy focus on old protectionist rhetoric about 'tech giants' and 'global competitors.' Europe isn’t going to overtake the tech giants anytime soon, and most Europeans know this. Instead, Europe should double down on its strengths in niche areas and fix the messy, outdated systems that are holding back its natural innovators.

Economists love to argue about what are the most impactful reasons dragging down productivity, but there are some undeniable factors that Europe needs to deal with: an aging population, labor market regulations (that are only getting tighter), low tech investment, a frustrating business environment with red tape, high taxes, underfunding in R&D, a lack of innovation results in academia, and regulatory fragmentation across Member States.

“We will support this by tackling challenges with e-commerce platforms to ensure consumers and businesses benefit from a level playing field based on effective customs, tax and safety controls and sustainability standards.”

The section on European competitiveness somehow veers off into talking about social platforms and e-commerce. It’s tough to see the logic behind how 'sustainability standards for e-commerce platforms' are supposed to boost European productivity in tech, but we’ll let that one slide.

European data revolution?

“To support the development of AI and other frontier technologies, Europe needs to exploit the untapped potential of data. Access to data is not only a major driver for competitiveness, accounting for almost 4% of EU GDP, but also essential for productivity and societal innovations, from personalised medicine to energy savings. However, too many companies in Europe struggle to get access to the data they need – while large foreign tech companies use European data to fuel their business. While ensuring high standards of data protection, we will support companies by improving open access to data, notably to support SMEs to fulfil reporting obligations. Europe needs a data revolution. This is why we will put forward a European Data Union Strategy. This will draw on existing data rules to ensure a simplified, clear and coherent legal framework for businesses and administrations to share data seamlessly and at scale, while respecting high privacy and security standards.”

The shortage of accessible data and the tangled web of regulations across the EU are major reasons why European founders with data startups often look elsewhere. It’s a problem that needs fixing but is not easy to tackle at the Member State level.

Opening up data for individuals and businesses demands significant national investment, especially since it's often controlled by state-owned companies that profit from selling it.

On top of that, some types of data—like health data—are either locked up tight and out-of-reach for European startups, or local regulators are simply unwilling to open up datasets that could be shared. The European Health Data Spaces should be somewhat helpful in helping get access to relevant health data, though for researchers mostly. 

Current model of financing innovation should be re-addressed

“Innovative European companies and start-ups should not be forced to look at the United States, Asia or other markets to finance their expansion. They should be able find what they need to grow here in Europe too. To do this, we will develop the proposal in the Enrico Letta report and propose a European Savings and Investments Union, including banking and capital markets. This will help leverage the enormous wealth of private savings in Europe to invest in innovation and the clean and digital transitions.”

Enrico Letta’s report focused extensively on how European citizens' savings often end up sitting in savings accounts or on foreign stock exchanges. It’s also true that European startups, especially those in the scale-up phase, often struggle to find enough capital and support at home, leading them to seek help across the Atlantic. Letta proposed several measures, including a European stock exchange for deep tech and a Savings and Investments Union. 

Europe is on the right track by acknowledging that innovative businesses need venture capital to scale. But there's one missing piece—it's time to re-evaluate how effective current innovation financing is for both businesses and academia. This isn’t a popular stance since European academia and some businesses have grown comfortable with the status quo.

Beyond Horizon projects with their competitive collaboration-based approach, certain funding mechanisms keep Europe stuck in a 'barely-innovation' limbo, where state-owned institutions distribute money for innovation with a set of strict requirements, including forecasting project’s outcomes approach that is antonym for innovation which needs room for risk and experimentation. 

The next European Commission needs to find chutzpah and take a hard look at the overall innovation funding landscape and change course, if needed. Doing so could not only save a lot of European money but also put an end to the 'Potemkin village' practices that give the illusion of innovation without real progress.

Public procurement needs drastic changes – protectionism is not it

 “A 1% efficiency gain in public procurement could save EUR 20 billion a year. And it is one of the main levers available to develop innovative goods and services and create lead markets in clean and strategic technologies.

I will propose a revision of the Public Procurement Directive. This will enable preference to be given to European products in public procurement for certain strategic sectors. It will help ensure EU added value for our citizens, along with security of supply for vital technologies, products and services. It will also modernise and simplify our public procurement rules, in particular with EU start-ups and innovators in mind.”

Public procurement, which accounts for 14% of the EU’s GDP, also received mention in the guidelines. But once again, the focus seems to be on protecting European companies rather than tackling the biggest issues - perhaps they are yet to be addressed in the Procurement Directive.

Some Western European businesses have been pushing for a 'European-tech-first' approach in public procurement for a while now. Public procurement in Europe is already a long, difficult, and bureaucratic process with limited entry points for small enterprises. Adding another layer of complexity by prioritizing European companies over the best ones for a specific project would only make things worse for the public administrations.

Instead, Enrico Letta’s forward-looking solutions for public procurement need to be reevaluated: moving away from the lowest-bid criteria, simplifying public procurement goals with fewer objectives, creating a common data space for procurement, stricter verification of economic operators, online matchmaking platform for joint procurements and more.

Social fairness, telework

“We need new impetus in areas where more progress is needed and we will frame this work in a new Action Plan on the Implementation of the European Pillar of Social Rights.

It will include initiatives looking at how digitalisation is impacting the world of work, from AI management, to telework and the impact of an “always on” culture on people’s mental health. New forms of work should no lead to fewer rights, and I will propose to introduce a right to disconnect.”

It’s easy to see why European politicians need to interchangeably use narratives of European competitiveness and social fairness—the EU is a democracy and a very complicated one. But Europeans should not forget that the EU is already known as one of the safest places for labor. While Chinese-style 996 (working from 9AM to 9PM, 6 days a week) practices could never (and should never) take root in the EU, further meddling in the labor policies pushes Europe even further behind other regions. 

The guidelines don’t dive into this issue directly, but the brief mention of 'telework' might hint at something on the Hungarian presidency’s agenda—‘the right to telework.’ This idea could potentially limit (or reduce) employers' ability to require employees to be physically present at a specific location. We will leave it to the reader to decide whether that’s one of the pressing issues the EU needs to focus on.  

Bans on infinite scrolls, autoplay, and push? 

“The early and teenage years are critical for brain and personality development – and are also times of vulnerability to harms from social media and excessive screen time. We must have an open and evidence-based debate on this issue. This is why we will launch an EU-wide inquiry on the broader impacts of social media on well-being.

 We will tackle unethical techniques used by online platforms by taking action on the addictive design of online services, such as infinite scroll, default auto play or constant push. We will also firmly combat the growing trend of abusive behaviour online with an action plan against cyberbullying.”

Application developers, take note—these political guidelines specifically mention plans to limit features like infinite scroll, autoplay, push notifications, and more.

While hardware and software companies already offer tools for parents to manage their kids’ screen time, it seems likely that, true to EU style, this won’t be seen as sufficient.

Let’s hope common sense prevails and that adult European consumers can make their own decisions about what they and their kids can or cannot do online.