The European Union's regulatory environment is facing criticism for hindering business growth and innovation, particularly in the technology sector. A report by Mario Draghi on EU competitiveness highlights the challenges created by complex regulations that affect the region’s ability to keep pace with global competitors.
One area where this impact is visible is business messaging. Messaging platforms are widely used globally for interactions between businesses and customers, such as sending boarding passes or promotional offers. According to data from Meta, there are 600 million conversations every day between people and businesses across WhatsApp, Messenger, and Instagram Direct. Nearly 80% of people worldwide message with a business at least once a week. However, the adoption of these services in the EU remains limited due to regulatory constraints.
Businesses outside the EU have access to advanced tools that allow them to share products and features with customers and engage directly with potential buyers. In contrast, EU companies face restrictions due to regulations like the ePrivacy Directive (ePD), which limits their access to customer data and insights. This leaves many European businesses reliant on less effective communication methods.
The regulatory environment has broader implications beyond messaging. Companies operating in regions with fewer restrictions benefit from advanced data analytics and automation tools that help improve engagement and return on investment. For example, Kaufland, a major European hypermarket chain, reports: “The biggest obstacles to Kaufland’s growth is legal complexity, not customer demand.” The company describes itself as “totally blind” regarding basic performance indicators for its WhatsApp campaigns in Germany compared to more sophisticated capabilities available in India and Brazil. As Kaufland states, Europe is “Totally behind the development compared to India.”
Other companies outside Europe demonstrate what is possible when fewer restrictions are in place. Ounass, an e-commerce platform in the Middle East, has seen significant results using business messaging: "Fifty per cent of their users read WhatsApp messages, a stark contrast to just 10 per cent for emails and 2-3 per cent for SMS." This shift has led to an increase in customer satisfaction from 80% to 90%, making WhatsApp their most effective channel for engagement.
Similarly, Rappi—a Latin American delivery app—has leveraged data-driven personalization through messaging campaigns: "For every order placed directly through an ad, four additional orders come from users who saw the ad but didn’t act right away."
Critics argue that interpretations of EU rules around segmentation, audience insights, and click-through rates prevent local businesses from accessing key data needed for growth. New artificial intelligence tools also lag months behind other countries due to these restrictions.
Calls for reform suggest that simplifying regulation could better align economic goals with privacy protections. There are concerns that current laws such as the ePD not only conflict with each other—such as GDPR—but also hinder objectives set out by newer legislation like the Data Act or AI Act aimed at developing digital infrastructure across Europe.
According to industry voices: "EU citizens and any company operating in the EU, in particular small and medium-sized businesses, are bearing the brunt of less performant tools." They urge lawmakers to update regulations so they foster innovation while safeguarding privacy.
"EU citizens and businesses need the EU to reset its regulatory approach and provide a framework and governance that secures a consistent, balanced and pro-innovation interpretation of the law," reads one call-to-action from stakeholders affected by these policies.