Europe is Dismantling Its Own Rulebook to Compete with America
April 13, 2026 – 7:41 am
On November 19, 2025, the European Commission published its Digital Omnibus package, a legislative proposal that aims to amend several key pieces of AI and data regulation in one go. The text emphasizes "simplification" throughout, but what it proposes is far from simple.
The package suggests:
- Delaying core obligations under the AI Act for high-risk systems by up to 16 months.
- Creating a new legitimate interest basis under GDPR for companies training AI models on personal data.
- Narrowing the definition of personal data itself.
- Removing the requirement for AI providers and deployers to ensure staff AI literacy.
The Commission’s Argument
The EU Commission argues that these changes are necessary to boost European competitiveness in artificial intelligence, stating that excessive regulation hinders European companies. This position is rooted in Mario Draghi’s competitiveness report from September 2024, which identified regulatory hurdles as one of the factors holding back Europe’s digital transformation and widening its productivity gap with the US.
Challenging the Premise
However, academic research by Columbia Law School professor Anu Bradford (2024) challenges this premise. She argues that the technological gap between the EU and the US cannot be attributed to stringent European digital regulation alone. Instead, she points to structural issues:
- The absence of a unified digital single market.
- Shallow and fragmented capital markets.
- Punitive bankruptcy laws.
- Difficulties attracting global tech talent through immigration policies.
Bradford’s findings suggest that Europe’s regulatory environment was largely non-existent during the period when US giants like Google, Meta, and Amazon established their dominance (before 2010). If light regulation were the key to success, Europe should have produced its own tech giants in those years; it did not.
Moreover, the State of European Tech 2025 report reveals:
- US startups attract funding at approximately 0.74% of GDP, compared to 0.35% for the UK and Ireland (the highest performers in Europe).