At the same time, there’s been a noticeable wave of criticism against the EU coming from US-based VCs and tech companies. Many posts claim the EU is “dying” as a tech hub, often pointing to stricter regulations and fragmented markets as reasons. While the EU undoubtedly has challenges, like limited access to growth capital and fragmented venture funding, these narratives often feel inflated.
Take USB-C as a standard, for example. Many US-based critics framed this as overreach by the EU, even though it benefits consumers and smaller tech companies by reducing proprietary lock-in. As a tech company owner myself, I see it as a win for democratization and innovation—it levels the playing field, making it easier for new entrants to compete.
It’s worth questioning if this negative sentiment is part of a coordinated effort to lobby against the EU. The lobbying budgets of major tech firms are enormous, and the stakes are high. The EU’s regulatory framework—designed to promote fair competition and protect users—directly challenges the monopolistic advantages that some companies rely on.
While Europe does need to address legitimate problems, like retaining talent and scaling startups, many of these critiques seem driven by those with vested interests rather than a genuine concern for the EU’s future. What do you think? Are these criticisms fair, or do they serve as a smokescreen for resisting necessary regulation?
I think that it's both wholly justified and almost entirely grassroots/bottom-up. A thriving tech/industrial ecosystem -- even a functional military-industrial ecosystem -- is basically incompatible with Europe's regulatory and taxation structures.
Much has been written recently about how Norway and Italy tax unrealized gains to such an extent that running a SV-style startup is basically illegal. See, e.g.: https://x.com/aledeniz/status/1842872753499607407
Labor regulations result in very high costs of failure, so that what would be profitable in California would be unprofitable in Germany: https://marginalrevolution.com/marginalrevolution/2024/12/wh...
As Boss Zvi put it, "Welcome to being a CEO in the EU with over 40m in revenue, now please report these 649 environmental and social indicators." https://x.com/jo3hill/status/1866450203743576478
And I could go on all day. Depending on the business you're in, it can be smart to incorporate in the Caiman Islands and work out of Europe on a satellite office basis, but you definitely want to limit your exposure to EU rules.
I'd only note that the EU is not a monolith, local regulations and tax laws can differ wildly, and some countries -- like Ireland and certain Baltic companies chasing investment -- are much more business friendly than others. (With Italy, Germany, and Norway in the "you'd have to be a masochist to start a business here" tier.)
What we don't have are those sort of stunts expecting a never ending of exponentional growth, with money to burn that grows on trees, and without any regard for employees working rights.
Those 58.76, 84.48 and 5.52 million people work somewhere (minus current unemployment rates).
It's not really justified to express anti-EU sentiment on the grounds of local laws which have little to do with the EU though...
Anyway, most US states have no unicorns and low levels of VC investment, despite zero exposure to EU rules and similar regulatory climates to California which receives more VC funding than the rest of them put together. For all Germany's famously pernickety regulation, Bavaria saw more VC investment than numerous larger US states last year and "you'd have to be a masochist to start a business here" Norway is in the top 10 countries worldwide for VC funding per capita which suggests that at least the masochists get funding! Frankly, it's unrealistic to expect any European country to be remotely like California in the near future for a whole host of structural reasons that have nothing to do with the EU or local regulations, and if the actual tradeoff is more like the labour laws of Michigan for the VC investment levels approaching that of Michigan it's not clear there's any win for Europe in deregulating.
Military ecosystems get a lot of exceptions
> about how Norway and Italy tax unrealized gains to such an extent that running a SV-style startup is basically illegal
These are two completely different things. Yes they don't get praise from me, but if you're planning how your company is going to work, you need to understand the differences (and yes Norway is the worse one here IMHO)
> Depending on the business you're in, it can be smart to incorporate in the Caiman Islands and work out of Europe on a satellite office basis, but you definitely want to limit your exposure to EU rules.
100% agree
But here's what most companies opening shop do: they have accountants and lawyers to help them navigate the bureaucracy (or subcontract some of the compliance work). People here take regulation to be "I've tried nothing and I've ran out of ideas" when it's mostly a subcontracting cost.
Exactly.
I feel it's simply put:
Europe is just further on the left of the `labour - capital` divide. As a region with insane inherited capital (all the old money), this makes perfect sense.
A lot of US media laments the corporatism of the US, and in the next article lambaste EU regulations... not understanding the irony of their position.
The EU took its tradeoffs seriously, and committed to them. Whether it's a good position... I can't tell, really. Can't see the future. But it's a very visible and understood tradeoff:
Pressure the top 5% to provide for the bottom 95%. You can't get laid off and stress about food - because a failure includes paying all the laid off employees a severance. It's bad for starting a business... but is it bad for the people and the society at large? Call me a socialist, but I think people shouldn't have their livelihoods depend on the 2-week cycle of salary.
Should there be a framework for a more risk-hungry sector? Probably, something to mimic the US, but the avenues for abuse are exploited the moment loopholes open.
TLDR: Europe, and Europeans, do not _want_ the trillion dollar companies.
Tl;Dr: Europe could have trillion dollar companies and still lean heavily towards labor, just like we could
And that’s why I will say ‘fuck you too’ rather than ‘goodbye’ when my O-1 is finally approved.
Is it? I mean before COVID and especially before 2008 EU was thriving and in reality there wasn‘t substantially more or less regulation back then. (Yes GDPR came, but I highly doubt that this was a major factor).
In my opinion EU countries missed web 2.0 and where way to risk averse and old school to invest in those startups, that is why many founders moved to US. But I don‘t think regulation is the major factor, may be A reason, but I doubt it is THE reason.
I think most of the „bad“ regulation is actually national. EU regulation in many cases makes it easier to make business than the respective national laws. Tax for example is mainly national. Despite some attempts of unification.
For established industries regulation just increases prices. ... Until a new technology comes up that allows new competitors to enter the market. Like Tesla, SpaceX.
> Are these criticisms fair
Of course they're not. Big tech is just about maximizing one single variable, technological growth, and they should be crushed.
But we got net neutrality right ? Well no, they fucked that up as well with ISP blocking whatever ports they want. The law is useless.
The fact is the EU don’t understand tech properly and they screwup all the regulation around it.
I'm actively trying to start something up and get out of corporate servitude for good. I am lucky to live in America, based on my experience with European tech leadership and the comments here. I'm also consistently shocked by the lack of technical expertise that my developer counterparts in the EU exhibit. Most of them demonstrate the depth of knowledge that a couple Coursera Python courses and about 40 hours of YouTube dev-fluencer videos would instill, despite them having several years of experience as a "senior software developer". It's a bit embarrassing, to say the least.
I can say that delays can and do happen because of regulation. This could be extra work for privacy regulations, or for accessibility standards, etc. Even just the fact that you need legal review in multiple languages can add delays. The more regulations you have and the diversity of regulations among the numerous locations you support, the more resources you need (time and/or personnel).
Most of the regulations are there for good reason. In my opinion, it's the differences between each supported region that causes the most problems. In some cases things like the EU help standardize the regs vs having 20 different definitions of them.
As for retaining talent and startups, that's not easy if your opponent has unlimited free reserve currency monopoly money.
Most of the comments seem to focus on the effect of their policies on smaller scale startups and entrepreneurs, which may certainly be a problem to adress, but as a consumer I see the EU at least taking some action on issues I care about.
And it goes beyond the reasonable criticism
"VC crowds" absolutely like bashing any regulation whatsoever. And while I can understand the effects on startups, at the same time they ignore the other amount of regulation and gotchas they have to deal in the US
In the same way some 90% of stuff we read about GDPR (or the recent charger regulation) is BS and cheap takes. "can be fined up to 10Mi Euros" is the typical "I don't understand GDPR anti-shibbolet"
There's also one important point that most people don't realize (especially Americans) is that the legal systems are different. And even Common law countries like Ireland and the UK (even before Brexit) worked in very different ways legally (and enforcement wise).
(And of course a lot of things people blame the EU for is just the local country regulation)