Amsterdam, THE NETHERLANDS – Almost four in five EU tech entrepreneurs say Europe’s maze of overlapping rules had a major impact on their businesses in the past 12 months, according to new research released today, just as Member States risk derailing efforts to simplify the European Union’s digital rulebook.
Highlighting internal barriers in Europe, 58% of founders delayed entering another EU market, 45% paused or cancelled features, and 44% experienced delayed or lost deals. The damage extends beyond startup leaders and investors: European consumers and businesses are waiting longer for new products, receiving less capable services, facing less choice, or missing out on innovations altogether.
The findings are a wake-up call for Europe as negotiations on the Digital Omnibus threaten to strip out its most meaningful simplification measures.
Indeed, Member States are resisting a proposal allowing businesses to report a cybersecurity incident once, rather than separately under seven overlapping frameworks. Council compromises have also removed from the Omnibus a key fix that would establish legitimate interest as a legal basis for responsible AI training, leaving developers with more uncertainty.
The new study, The Realities of Scaling in Europe, was conducted independently by DutchBasecamp and launched in partnership with the Computer & Communications Industry Association (CCIA Europe). It examines how Europe’s digital rulebook affects products, customers, resources, and long-term strategy.
Drawing on a survey of 155 European startup founders and in-depth interviews, the report provides a first-hand account of business decisions rarely captured in official statistics: features abandoned, launches postponed, customers lost, and markets left unentered.
Nearly a quarter of respondents spent over 30% of their budgets on compliance costs, while 24% are considering or have already relocated their headquarters – primarily due to regulation. Only 21% reported no material impact from EU or national rules. More than half avoided an EU country over regulatory concerns, reflecting differences in national procedures, interpretations, and enforcement across what is supposed to be a Single Market.
The ongoing Digital Omnibus negotiations in Brussels show how quickly ambition to simplify can collide with institutional resistance and national interests.
The recently agreed AI Omnibus demonstrated a similar lack of ambition. Although it provided breathing room by postponing certain deadlines, more substantive simplifications were rejected and developers were left with limited implementation time while essential codes, guidance, and standards are still missing.
The European Parliament and Member States should not delay or weaken these much needed reforms, CCIA Europe reiterates. Otherwise, simplification will remain a political promise rather than a tangible improvement for Europe’s tech sector.
The findings were presented at the ‘EU-Nough Tech Rules? The Realities of Scaling in Europe’ event in Amsterdam, which brought together startup leaders, tech entrepreneurs, investors, policymakers, and industry representatives.
The following can be attributed to Masha Moisseyeva, Managing Director of DutchBasecamp and lead author of the study:
“Europe is already losing tech founders, products, and growth. When 45% of those surveyed have paused or cancelled features, 58% have delayed entering another EU market, and 44% have lost or delayed deals in a single year, the urgent need for regulatory simplification is no longer a theoretical debate about EU competitiveness. The damage is happening now.”
“Founders are not asking the EU to lower its standards. They are asking for clear, workable rules they can rely on across the Single Market. Instead, uncertainty and overlapping obligations are dictating what they build, who they serve, and how fast they grow.”
The following can be attributed to Daniel Friedlaender, Senior Vice President and Head of CCIA Europe:
“We warned from the start that the Commission’s proposals to simplify the patchwork of EU tech and digital rules were only the bare minimum. Instead of going further, Parliament and Council are now weakening, rejecting, or delaying even the most basic fixes.”
“Europe’s innovators have shown remarkable patience in navigating today’s regulatory maze, but that patience is running out. EU institutions and Member States need to wake up: 2026 must bring real improvements for tech companies. Europe knows the problems. If we refuse to fix them, we can’t be surprised if our founders look outside the EU for success.”
Notes for editors
The full report, ‘The Realities of Scaling in Europe: How EU digital regulations limit tech founders when scaling in Europe,’ is available at https://dutchbasecamp.org/eu-regulations-founders-perspective.
The findings draw on a survey of 155 tech founders and senior operators conducted between February and June 2026, complemented by in-depth interviews focussing on AI, fintech, digital health, legal technology, developer tools, and public-safety technology.
Respondents were recruited through DutchBasecamp’s network, partner organisations, and open participation. The research reflects the first-hand experiences of founders rather than a population-level estimate of the entire EU startup ecosystem.
