Core Viewpoint - The GDPR, once hailed as a "gold standard," is now criticized for stifling innovation in the European internet industry, which is lagging behind the US and China [1][2] Group 1: Impact of GDPR on Innovation - GDPR's strict regulations create significant challenges for the European internet sector, particularly in data acquisition for AI development, which relies on vast amounts of data [2][3] - Research indicates a notable decline in venture capital flowing into the EU tech sector post-GDPR implementation, affecting both the number and total amount of transactions, especially for startups [2][3] Group 2: Operational Challenges for Companies - Post-GDPR, European users' website traffic and online revenue have decreased, with compliance costs disproportionately impacting small and medium enterprises compared to tech giants [3] - GDPR has inadvertently created a "moat" for established companies like Google and Meta, making it harder for new competitors to enter the market [3] Group 3: Structural Issues in the European Tech Industry - The European market is fragmented due to multiple languages, cultures, and legal systems, complicating the establishment of a unified market for startups [4] - European capital markets are shallow, relying more on bank loans than venture capital, which limits funding for startups in critical growth stages [4][5] - Cultural attitudes in Europe are more conservative towards failure, which discourages entrepreneurial risk-taking compared to the US [5] - Europe struggles to attract and retain high-tech talent, with many skilled individuals moving to the US for better opportunities [5]