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EuroStack's Response to the Call for Evidence - Single Market Strategy for 2025

2025-01-29

At EuroStack, we've been closely following the European Commission's efforts to shape the future of the Single Market. We believe that a strong, unified, and digitally sovereign Europe is essential for our continent's future prosperity and security. That's why we were eager to contribute our perspective to the recent Call for Evidence on the Single Market Strategy for 2025. Our response, submitted on January 29th, outlines a vision for a Single Market that prioritizes European technological independence, fosters the growth of European SMEs, and ensures that the digital transformation benefits all Europeans. We're excited to share the key elements of our vision and advocate for a Single Market built on open source, interoperability, and a commitment to European values.

EuroStack's Response to the Call for Evidence - Single Market Strategy for 2025

Submitted by: EuroStack - The European Sovereign Digital Stack Initiative
Date: 2025-01-29

1. Executive Summary

EuroStack, an initiative dedicated to fostering European digital sovereignty and independence, welcomes the European Commission's initiative to develop a Single Market Strategy for 2025. We believe that an integrated, modernized, and sovereign Single Market is crucial to bolstering European competitiveness, fostering innovation, and ensuring digital autonomy. Our approach emphasizes open source, interoperability, SME empowerment, and a values-driven approach to digital transformation.

Our response highlights the critical importance of enforceable interoperability based on strict open standards, targeted support for European SMEs, and a strategic focus on digital sovereignty within the Single Market framework. We believe that building a truly sovereign digital ecosystem, based on open source principles, is paramount to creating a resilient, competitive, and independent European digital future.

We stress the urgency of assessing the impact of existing regulations on European technological SMEs and reducing their compliance burden. Achieving a level playing field with other geopolitical blocs is vital for the success of the Single Market Strategy. In alignment with the principles outlined in the Draghi report, we advocate for lowering the cost of doing business for European tech SMEs, primarily by reducing regulatory burdens.

2. Problem Definition: Barriers to the Single Market and the Need for a Paradigm Shift

EuroStack concurs with the Commission's assessment that regulatory and administrative barriers hinder the Single Market, particularly in the cross-border provision of services. However, we contend that the current approach has inadvertently favored large, non-European digital platforms, especially in the cloud sector. This has led to several critical challenges:

  • Dominance of Non-European Hyperscalers: The European cloud market is dominated by a few non-European hyperscalers, creating significant dependencies and undermining European digital sovereignty. Their proprietary technologies and closed ecosystems limit competition, stifle innovation, and create vendor lock-in, directly contradicting our principles of openness and freedom of choice.
  • Unfair Competitive Advantages: These hyperscalers often benefit from insufficiently enforced regulatory frameworks, enabling practices that disadvantage smaller European competitors, such as predatory pricing and tax optimization. This runs counter to EuroStack's values of fairness and a level playing field.
  • Barriers to SME Growth: European SMEs, especially in the cloud sector, face significant hurdles in scaling and competing. These include limited access to funding, complex regulatory requirements, and difficulty penetrating markets dominated by established players. The growing cost of doing business, exacerbated by regulations, further hampers their growth. These barriers contradict our principle to empower SMEs. Regulations designed to level the playing field have inadvertently become obstacles to the growth of local SMEs.
  • Data Sovereignty and Security Concerns: Reliance on non-European cloud providers raises serious concerns about data sovereignty, security, and privacy, conflicting with EuroStack's emphasis on data control and protection under European jurisdiction. The extraterritorial reach of laws like the US CLOUD Act further complicates this, potentially exposing European data to access by foreign governments, directly challenging our principle of technological autonomy.
  • Lack of Enforceable Interoperability: The absence of strong, enforceable interoperability requirements based on strict open standards (EIFv1) exacerbates vendor lock-in, limiting the ability of European businesses to choose and combine different cloud services. This directly contradicts EuroStack's core principle of interoperability by design.

3. A Framework for a Sovereign and Competitive Single Market: The EuroStack Vision

To address these challenges and build a truly sovereign and competitive European digital ecosystem, EuroStack advocates for a comprehensive approach:

  • SME-Friendly Regulations: Regulatory frameworks should be reformed to remove unnecessary burdens on European SMEs, promoting a level playing field. We support a differentiated regulatory approach that distinguishes between European technological SMEs and non-European actors or distributors of non-European technology. Reducing regulatory burdens on European technological SMEs is now crucial for their survival, as compliance costs are stifling innovation.
  • Primacy of European SMEs: Supporting the growth and success of European SMEs in the cloud sector is paramount. This necessitates a level playing field with access to resources and global competitive opportunities.
  • Digital Sovereignty as a Strategic Imperative: Promoting European technological independence and reducing reliance on non-European technologies is essential, particularly in critical areas like cloud infrastructure, cybersecurity, and data management, aligning with EuroStack's core value of digital sovereignty. Resilience should be a key focus, ensuring that European countries have contingency plans for all critical layers of their tech infrastructure.
  • Promoting European Hardware Solutions: Recognizing the importance of reducing dependence on non-European hardware and promoting European-based solutions as a strategic imperative.
  • Enforceable Interoperability through Strict Open Standards: Interoperability, based on strict open standards (EIFv1) must be a fundamental principle of the Single Market, ensuring seamless data exchange and preventing vendor lock-in.
  • Strategic Use of Public Funding and Procurement: Public funding and procurement should be directed towards European cloud solutions and open source projects, with a focus on supporting SMEs and fostering innovation. "Public money, public code" and "priority to open source in public procurement" should be the guiding principles.
  • Harmonized European Policies: A unified European approach to cloud strategy and digital sovereignty is needed, avoiding fragmented national policies that undermine the Single Market, reflecting EuroStack's call for strong coordination among EU member states.
  • Open Source and Open Standards as Cornerstones: Open source software and open standards should be prioritized in public procurement and digital infrastructure projects to ensure transparency, security, and long-term sustainability, aligning with EuroStack's "Open Source First" principle.

4. Specific Recommendations for the Single Market Strategy 2025: Implementing the EuroStack Vision

EuroStack proposes the following concrete recommendations, for the Single Market Strategy for 2025:

  • Emergency Act to Reassess Compliance Cost and Cost of Doing Business: Conduct a comprehensive impact study and consider waiving the most harmful regulations for SMEs, as a matter of urgency.
  • Establish a European Sovereign Cloud Fund: Create a dedicated fund to support the development and growth of European cloud SMEs, prioritizing projects that adhere to strict open standards, enforceable interoperability, and open source principles. This fund should prioritize "moonshot" projects that aim to develop cutting-edge, open source-based cloud and edge technologies where Europe can demonstrate leadership. This aligns with EuroStack's vision for strategic investment in European-grown technologies.
  • Introduce technology resilience (i.e., having a plan B for everything) as a critical aspect of sovereignty and security in cyberspace.
  • Mandate Enforceable Interoperability: Develop and enforce legally binding requirements for interoperability in cloud services, based on strict open standards (EIFv1). This should include:
    • Mandatory open APIs for data portability and service integration.
    • A zero-cost cap on data egress fees when switching providers.
    • Standardization of data formats and protocols.
    • Independent verification mechanisms for interoperability claims.
    • Dispute resolution mechanisms to address non-compliance.
  • Reform Public Procurement:
    • Implement an "Open Source and European Cloud First" policy, requiring public administrations to prioritize European cloud solutions based on open source technologies and strict open standards, reflecting EuroStack's principles of "Public Money, Public Code" and "Open Source First."
    • Introduce "Buy European" provisions, reserving a portion of public procurement budgets for European technology SMEs, ensuring that public spending is supporting European innovation.
    • Simplify procurement processes for SMEs and promote modular procurement to break down large contracts, fostering SME participation as advocated by EuroStack.
    • Mandate the use of comprehensive life-cycle costing models that consider long-term costs, including interoperability and exit costs, aligning with EuroStack's sustainability principles.
  • Create a "European Cloud" Label (aligned with the EuroStack Directory Project): Develop a recognizable label for cloud services that adhere to strict open standards, enforceable interoperability, European data protection principles, and a commitment to open source development. This label would provide a clear signal to the market, promoting trust and facilitating the identification of truly sovereign European solutions, in line with the EuroStack Directory Project's goals.
  • Strengthen the Digital Markets Act (DMA) and its Enforcement: Ensure rigorous enforcement of the DMA, particularly regarding interoperability, data portability, and self-preferencing. Consider expanding the scope of the DMA to include more stringent requirements for open standards and interoperability within designated Core Platform Services (CPS), aligning with EuroStack's call for enforced interoperability.
  • Promote Digital Skills and Open Source Expertise: Invest in training programs to develop a workforce proficient in open source technologies, cloud computing, and interoperability standards, with a focus on reskilling and upskilling initiatives. This is crucial for supporting the growth of a vibrant European open source ecosystem and aligns with EuroStack's emphasis on education and skills.
  • Foster Public-Private Partnerships for Innovation: Establish public-private partnerships focused on developing next-generation cloud and edge technologies based on open source and open standards. These partnerships should prioritize European SME involvement and aim for ambitious projects that can position Europe as a global leader, reflecting EuroStack's collaborative approach.
  • Address Market Concentration: Implement stronger antitrust measures to address the dominance of non-European hyperscalers and ensure fair competition in the European cloud market. This could involve stricter scrutiny of mergers and acquisitions and investigations into anti-competitive practices, but primarily it should involve the promotion of alternative, European-led, open source-based cloud ecosystems.
  • Promote European Hardware Solutions: Develop a strategy to reduce dependence on non-European hardware, particularly for critical infrastructure. This could involve supporting the development of European-based hardware solutions or ensuring that critical components are sourced from trusted European manufacturers.
  • Reject Fragmented National Approaches: The Commission should actively discourage fragmented national cloud strategies and promote a unified European approach to cloud sovereignty, based on common standards and interoperability.
  • Resist "Sovereignty Washing" Initiatives: The Commission should be wary of initiatives that offer a facade of sovereignty while still relying on non-European technologies or creating new forms of lock-in. The focus should be on genuine technological independence and open solutions, in line with EuroStack's principles.

5. Conclusion

The Single Market Strategy for 2025 presents a pivotal opportunity for Europe to assert its digital sovereignty and build a more competitive, innovative, and resilient digital ecosystem. By embracing the principles outlined in this response, particularly the emphasis on reducing the cost of doing business for European tech SMEs, enforceable interoperability, strict open standards, support for European SMEs, and a strategic focus on open source, the European Commission can create a Single Market that truly serves the interests of European businesses and citizens.

We urge the Commission to adopt a bold and ambitious approach, recognizing that digital sovereignty is not just a technical issue but a strategic imperative. Implementing the recommendations in this response will ensure the Single Market becomes a driver of European innovation, competitiveness, and autonomy, rather than a conduit for the dominance of non-European tech giants. The EuroStack initiative stands ready to collaborate with the Commission and other stakeholders to realize this vision of a truly sovereign European digital future.

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