The European Union has always been a frontrunner in setting global regulations across various industries, and the upcoming year is no different.
As 2023 progresses, the EU has a series of new regulations on the horizon across various sectors, promising to impact the way businesses operate in the region. While the geopolitical and macroeconomic uncertainty persists due to the Russian invasion of Ukraine, the EU’s focus on strategic autonomy, green energy transition, and regulatory coherence is expected to stay steadfast.
In this article, we will take a dive into seven upcoming EU regulations for businesses spanning different industries and explore the opportunities they present for the Central and Eastern European (CEE) founders.
The Data Act
Status: The proposal was adopted by the European Commission on 23 February 2022.
Overview: This regulation aims to promote fairness in the distribution of value from data and encourage data-sharing across sectors, especially for non-personal industrial data and IoT data. The goal is to prevent manufacturers from locking data away for their exclusive use, which can make it difficult for new companies to enter the market or established competitors to offer new services. By accessing your own data, you can develop innovative services that add value to the market and offer your customers better services at better prices.
Tech Verticals that would be affected: ConsumerTech, IoT, HealthTech, EnterpriseTech
The Artificial Intelligence Act
Status: It is unlikely that the act becomes binding law until late 2023.
Overview: The AI Act aims to create a globally recognized factory for producing safe, trusted, and ethical AI outcomes that respect existing laws on fundamental human rights and EU values.
So, what does that mean for founders? If you’re building high-risk AI systems (like CV-sorting software for recruitment procedures or credit scoring software), you’ll be legally required to meet a defined list of criteria before you can integrate those systems into the single market. Complying with regulations that require continuous risk evaluation and mitigation is just part of doing business in our economic reality. The AIA requires businesses to design AI systems with transparency, explainability, and ethics embedded in their core, and have monitoring, guardrails, and governance capabilities in place to ensure continued ethical compliance. By building AI systems that meet these criteria, CEE founders can position themselves as leaders in the development of ethical AI.
Tech Verticals that would be affected: DevOps, HR Tech, Mobility, EdTech, HealtTech
Cyber Resilience Act (CRA)
Status: The proposal was published by the Commission on 15 September 2022. It is not yet adopted by the EU Parliament.
Overview: The regulation seeks to ensure that digital products are developed and marketed with fewer vulnerabilities, making them more secure for users. The CRA will require manufacturers to prioritize cybersecurity throughout a product’s life cycle, from design to end-of-life, and will create conditions that allow users to make informed decisions about the security of the products they choose to use.
For founders, the CRA presents both challenges and opportunities. On the one hand, complying with the new regulations could require significant investment in cybersecurity measures and product development. On the other hand, the CRA could lead to increased demand for cybersecurity services and products, creating new opportunities for startups in this space.
Tech Verticals that would be affected: Cybersecurity, Enterprise Tech, Consumer Tech, Fintech
European Health Data Space (EHDS)
Status: The proposal was published on 3 May 2022. It is not yet adopted by the EU Parliament.
Overview: The European Health Data Space (EHDS) is a new initiative aimed at addressing challenges related to health data access and sharing. The act could transform the pharmaceutical sector by expanding the availability of electronic health data for secondary use. It will allow electronic health data to be further processed for scientific research, development and innovation activities, and training purposes. The EHDS has the potential to unlock a wealth of health data for startups in the pharmaceutical sector, enabling them to develop innovative products and services that contribute to public health and social security.
Tech Verticals that would be affected: HealthTech
The Data Governance Act (DGA)
Status: The rules will start to apply on 24 September 2023.
Overview: The Data Governance Act (DGA) aims to establish new rules about the way data is shared and reused across sectors and EU countries. By making public sector data more accessible, the DGA will unlock opportunities for startups in healthcare, mobility, environmental, agricultural, and public administration sectors by unlocking data that was previously out of reach. Moreover, the DGA will facilitate data-sharing across sectors and borders, ensuring that the right data is used for the right purpose. The act will also create a level playing field for startups, ensuring that they have access to the same data as larger companies, giving them a fair shot at competing in the marketplace. Finally, the DGA will establish trust in data intermediaries, enabling individuals and businesses to share their data safely and securely.
Tech Verticals that would be affected: HealthTech, Mobility, GreenTech, AgriTech
The Digital Markets Act (DMA)
Status: The rules start to apply on 2 May 2023.
Overview: The Digital Markets Act is set to create a fairer environment for business users who depend on large online platforms (gatekeepers), such as search engines, social networks, and app stores. The DMA will enable gatekeepers to innovate and offer new services while limiting their ability to use unfair practices against businesses and customers. This means that startups and other players in the digital economy will be able to operate in a more equitable environment.
The act also requires gatekeepers to allow business users to access data generated on their platforms, which could be a valuable resource for startups looking to innovate. Another important rule under the DMA is that tech giants must provide advertisers with detailed information on the use of, and payment for, its advertising services, giving startups greater transparency into the advertising practices of these gatekeepers.
Tech Verticals that would be affected: MarTech, E-Commerce
The Digital Services Act (DSA)
Status: The rules will become fully applicable across the EU on 17 February 2024.
Overview: The Digital Services Act (DSA) aims to address the challenges of digital transformation and new business models in a way that protects consumers, keeps online platforms transparent and accountable, and fosters innovation and competition within the EU.
The DSA applies to all intermediary services offered to recipients in the EU, including internet service providers and online platforms, and it introduces a range of obligations concerning how platforms moderate content, communicate with users, advertise, respond to crises, and maintain accountability to regulators and users. Furthermore, the DSA’s focus on protecting consumers and their fundamental rights online and promoting a safe digital environment can create new business opportunities for startups that prioritize privacy, security, and ethical data practices.
Tech Verticals that would be affected: ConsumerTech, MarTech
