
Tech start-ups across Europe are struggling to access coronavirus support schemes because of EU state aid rules, industry groups from several countries say, threatening to undermine Brussels’ attempts to stimulate local rivals to Silicon Valley, reported The Financial Times.
More than a dozen tech trade groups, including industry associations in France, Germany, the UK and Ireland, have together written to EU commissioner Margrethe Vestager calling for “more flexibility” in member states’ ability to provide “vital” support to lossmaking but innovative small businesses.
National governments in several countries have offered schemes to support R&D or encourage venture capital investment. However, several of these programmes have hit roadblocks in Brussels owing to the EU’s determination that they fall foul of the “undertakings in difficulty” test — a part of European competition law designed to prevent member states from propping up failing businesses with state aid.
Many venture-backed tech start-ups operate at a loss in order to drive faster growth, or have sold a large portion of the company to venture investors in recent years, putting them in technical breach of the rules if they take government support.
“Only taking the current cash flow into account belittles the economic potential of these start-ups and prevents them from receiving much-needed support,” said the letter to Ms Vestager. “In doing so it can undermine the post-Covid-19 recovery, as it is today’s loss making start-ups which will be the driver for economic and job growth in the future.
Featured News
UFC Reaches $375 Million Settlement in Antitrust Case
Feb 6, 2025 by
CPI
Brazilian Architecture Council Convicted of Antitrust Violations
Feb 6, 2025 by
CPI
Bipartisan Bill Seeks to Ban Chinese AI Software from US Government Devices
Feb 6, 2025 by
CPI
Senators Call for Investigation into RealPage Algorithm’s Impact on Military Housing Costs
Feb 6, 2025 by
CPI
ECB Seeks Faster Digital Euro Legislation Amid US Stablecoin Push
Feb 6, 2025 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – International Criminal Enforcement
Jan 23, 2025 by
CPI
The Antitrust Division’s Recent Work to Combat International Cartels
Jan 23, 2025 by
Emma Burnham & Benjamin Christenson
Information Sharing: The New Frontier of U.S. Antitrust Enforcement
Jan 23, 2025 by
Brian P. Quinn, Casey Kovarik & Michael Tubach
The Key Role of Guidelines on Exchanges of Information Among Competitors and the Divergent Transatlantic Paths
Jan 23, 2025 by
Rosa Abrantes-Metz & Albert Metz
Leniency, Whistleblowers, and Compliance
Jan 23, 2025 by
Richard Powers, Tara O’Malley & Cory Gordon