EU Proposes Streamlined Digital Rules to Boost Competitiveness

(Bloomberg) — The European Union unveiled a sweeping plan to reduce digital regulation as the bloc strives to boost its competitiveness in artificial intelligence and aid local technology companies.

The proposal calls for delaying rules on high-risk AI systems for as much as 16 months, streamlining the process to report cybersecurity incidents, and easing data protection regulations to facilitate training AI models, according to a statement Wednesday from the EU’s executive arm, the European Commission. 

The plan comes after a push by European and American tech companies, the Trump administration and members of the bloc to reform regulations seen as over-reaching and poorly defined. Critics say the bloc’s AI rules are too complicated and contradictory, and warn Europe could fall further behind the US and China in the emerging technology. 

“By cutting red tape, simplifying EU laws, opening access to data and introducing a common European Business Wallet we are giving space for innovation to happen and to be marketed in Europe,” the EU’s technology czar Henna Virkkunen said in the statement, referring to a tool that will allow businesses and governments to digitize tasks that currently need to be done in person. 

The proposal, which needs the approval of European governments and lawmakers, is the seventh the commission has floated in less than a year as part of a deregulation drive aimed at reviving the EU’s sluggish growth. 

French President Emmanuel Macron and German Chancellor Friedrich Merz, who represent the EU’s two biggest economies, lent support to parts of the proposal at a digital sovereignty summit in Berlin this week. 

Some provisions of the AI Act are already in effect, and requirements for so-called high-risk AI systems are set to come into force next August if the proposal isn’t approved.

In a much-cited 2024 report on European competitiveness, former Italian Prime Minister Mario Draghi singled out the bloc’s extensive digital rulebook as a drag on local technology companies’ performance. He later called for pausing the implementation of the AI Act. 

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