The European Commission recently unveiled a proposal targeting small mid-cap enterprises as part of a broader strategy to enhance the single market. Businesses employing between 250-750 staff with an annual turnover of under €150 million are particularly important in fuelling international growth. Their growth and success are important to the global market development. The purpose of the proposal is to narrow what the administration calls the regulatory divide between small and medium-sized companies and big business.
Under the proposal, small mid-caps would be exempted from some EU data protection, climate and sustainability rules. This regulatory relief is intended to create a more conducive environment for these companies to establish and operate across the European Union. Removing obstacles to the single market is one of the Commission’s top priorities. In doing so, they will help create expansion in one of the most important sectors for economic dynamism.
Still, industry leaders are doubtful about whether the proposal will be effective. Experts point out that at best, the initiative may alleviate General Data Protection Regulation (GDPR) burdens for only 0.2% of EU companies. Claudia Canelles Quaroni, a representative from the European Data Protection Board, noted, “At best, today’s proposal will ease GDPR burdens for just 0.2% of EU companies.” She further criticized the limited scope of the initiative, stating, “While well-intentioned, its limited scope means it won’t meaningfully strengthen Europe’s dwindling digital competitiveness.”
Ben Butters is with the European business community. The concern expressed in this testimony echoed Mr. DeFazio’s sentiments, but more importantly highlights the relevant historical context behind such proposals. “Every Commission term seems to feature a flagship communication on the single market, going back to the Monti Report in 2010, but unfortunately these have not always led to tangible improvements for businesses,” he stated.
Yet, in making these proposed exemptions, the stakeholders were right to have their concerns raised about the potential implications for consumer rights and regulatory integrity. Agustín Reyna warned, “Opening the GDPR could not only put consumer’s rights at risk but create legal uncertainty for companies, raising their costs if they would need to adapt to new rules.” He emphasized that “simplification must in no way equal watering down standards.”
Industry representatives insist that close cooperation between the member states will be needed to make the single proposal fly. Stéphane Séjourné remarked, “The companies are ready. It’s up to us to get the member states on board now.” The sentiment reflects a collective desire to see meaningful changes that genuinely support small mid-caps without compromising established regulatory frameworks.
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