The European Union has been underpinned by a robust and comprehensive set of regulations since its foundation, which has been one of the main strengths of the Single Market. Any attempt to undermine these rules was usually given short shrift. But over the past few years the EU’s commitment to regulation has become a source of tension with its main trading partners and increasingly from within.
“The EU regulates while the US innovates” has been a popular refrain among senior officials in the Trump administration and at boardroom level among big US tech firms. The European Commission has now unveiled an Omnibus Bill aimed at simplifying regulations covering artificial intelligence, data protection and privacy. The move has prompted criticism, which ranges from industry groups accusing the Commission of not going far enough to a coalition of NGOs claiming Brussels has caved in to pressure from the US.
In reality, much of the pressure on the Commission was coming from closer to home. Mario Draghi, the former Italian Prime Minister, compiled a report into European competitiveness, which was published in September 2024. He recommended a series of far-reaching reforms across the digital economy, amid concerns the EU was falling behind the US and China in AI.
The EU had introduced one of the world’s first attempts to regulate AI through an AI Act in July 2024. The rationale for the Bill was that it would provide a solid regulatory framework that would enable investment in AI to flourish. The reality has been somewhat different. The Omnibus Bill has pared back and delayed the introduction of many provisions in the AI Act. The Bill also proposes the sweeping simplification of rules relating to data collection and privacy.
RM Block
It will take time to judge whether the Bill has the desired effect of boosting innovation and investment while at the same time protecting EU citizens. However it is a welcome step to achieve these aims, even if the rapid evolution of this area is likely to require more to be done in the years ahead.
