On August 12, the European Union’s Packaging and Packaging Waste Regulation took effect. Twelve days later, Alain Pannetrat — who runs Lectronz, a marketplace for open-source hardware makers — published a post explaining what the rule means for his sellers. Under the PPWR, any business that places packaging on the EU market must appoint an “authorized representative” in every member state it ships to, and register with each country’s packaging-waste scheme. There is no revenue threshold, no volume floor. A maker in Germany selling, say, a €30 circuit board to a customer in Estonia now needs a representative in Estonia. The post went viral on Hacker News, and the predictable response followed: outrage at Brussels, lamentations about red tape, the usual.

The more interesting fact is that the European Commission agrees the rule is broken. It has proposed a retroactive exemption for micro-enterprises — defined as businesses with up to 49 employees and €10 million in annual turnover. The problem is the calendar. The European Parliament’s first reading of the exemption isn’t scheduled until October 2026 at the earliest. That leaves a window of roughly two months — August and September — during which the rule applies to everyone, including the solo maker shipping forty boards a year, and the fix is pending.

The Commission Knows. The Calendar Doesn’t Care.

The Commission’s own proposal is the strongest evidence that the rule, as written, is a mistake. You don’t propose a retroactive exemption for a rule you think is working. The Commission looked at the authorized-representative requirement and concluded that it lands hardest on solo self-employed individuals while barely touching large corporations. The German e-commerce association Händlerbund is now appealing to the Parliament to adopt the Commission’s fix.

But here’s the thing about a solo entrepreneur: they don’t have until October. A maker deciding whether to keep selling to the EU makes that decision in August. They look at the cost of appointing a representative in France, in Spain, in Estonia, and they do the arithmetic. If the representative costs more than their annual revenue from that country, they stop selling there. The decision is hard to reverse — rebuilding customer relationships, relisting products, re-registering. By the time the Parliament gets around to reading the exemption, the damage is done. The EU’s error-correction loop is slower than the decision loop of a one-person business.

One seller on Lectronz’s forum put it plainly: “I ship maybe forty boards a year to the EU. The representative in France costs more than my entire French revenue. I’m not a business, I’m a hobby that occasionally makes money. The rule doesn’t see the difference.”

A Regressive Rule, Not Just a Burdensome One

The predictable take on this story is “regulation kills small business.” That’s true but incomplete. The more precise point is that this specific rule is regressive. It’s a flat compliance cost — the same authorized-representative requirement applies whether you ship 50 units or 50,000. A corporation shipping 50,000 units amortizes the cost of a representative across a large revenue base; it’s a rounding error. A maker shipping 50 units absorbs the full cost against a tiny revenue base; it’s existential.

This is the opposite of what regulation is supposed to do. Regulation is supposed to constrain the powerful and protect the small. The PPWR, as written, does the reverse. It’s a moat. It doesn’t just burden small business — it actively advantages large business by raising the fixed cost of market participation. The incumbent corporation can pay the toll; the newcomer cannot.

The single market’s founding promise was that a one-person shop in Germany could sell to a customer in Estonia.

That promise is now broken — not by malice, but by a regulatory model that assumes every business is a corporation.

The EU Regulates as if Every Business Is a Corporation

The deeper problem isn’t this rule. It’s the model that produced it. The EU’s regulatory machinery is built to regulate corporations — entities with compliance departments, legal counsel, and the scale to absorb fixed costs. It has no concept of the long tail of commerce: the maker in a spare room, the designer in a garage, the engineer selling niche hardware to a few hundred customers across the continent.

And the long tail matters. It’s where innovation actually happens. The maker selling a niche circuit board today might be the founder of the next big hardware company tomorrow — or their niche product might enable someone else’s. The EU’s regulatory model treats these people as if they were corporations, and in doing so, it filters them out of the market before they have a chance to grow.

The Commission’s proposed exemption is a step in the right direction. But it’s a carve-out, not a fix. The fix is to recognize that a regulatory model built for corporations will always, by default, crush the long tail — and to build a model that doesn’t. Until then, the EU will keep making rules that make sense for Siemens and break the maker in a spare room. And the makers will keep leaving.

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