Wednesday, November 19 is “the exact date that Brussels finally abandoned its decade-long dream of becoming the dominant global regulator that would rein in US tech giants like Google and Apple,” wrote Politico. Indeed, a week ago it completely backed down on its data and privacy rules and put AI regulation on hold until at least 2027.
The move is part of a wider effort to make European industries more competitive against the US and China. In this way, as the magazine notes, the epilogue was written for the so-called “Brussels Effect” – the notion that the EU will lead global technology legislation and set international standards for data protection and the use of Artificial Intelligence.
The pressure from the US and the interests of the technological giants
Many analysts argue that it now determines the deregulation course. US President Donald Trump has reportedly dampened Europe’s ambitions by threatening tariffs and accusing the EU of attacking “incredible American tech companies”.
The decision to deregulate comes after a tumultuous time in which the Trump administration has reportedly pushed the EU to scrap regulations that big tech giants and Trump himself see as “taxes” against American companies. At the same time, companies such as Google and Meta have led a widespread effort to lobby for less stringent rules.
The proposed changes
Proposed changes to EU AI regulations initially require a controversial amendment to the General Data Protection Regulation (GDPR). In fact, many MEPs from the left and the center have already expressed strong opposition, which is why approval by the European Parliament is not expected to be easy.
But if approved, the changes will make it easier for tech companies to use personal data to train AI models without needing consent, while also aiming to reduce “cookie fatigue” by reducing the number of times users are prompted to select their desired privacy settings while browsing the web.
The Commission also confirmed it will delay the implementation of key parts of the Artificial Intelligence Act, which came into force in August 2024 but is not yet fully applied to companies.
Because Europe is changing course
Behind the effort to relax the rules appears to be the expected economic boom associated with Artificial Intelligence technologies. The EU argues that the “simpler” rules will help European companies grow and stay innovating, while maintaining high European standards for fundamental rights, data protection and security.
However, the Guardian commented that “the hundreds of billions of dollars spent on AI trump Europe’s commitment to digital privacy and tight tech regulation,” while Politico similarly noted that “the bloc has traded its role as the world’s tech policeman for a ticket to the AI race.”
Of course, former Italian Prime Minister Mario Draghi already warned a year ago that Europe has fallen behind the US and China in innovation and is lagging behind in emerging technologies that will define future growth, such as Artificial Intelligence.
From the “Brussels Effect” to the “Washington Effect”
Brussels has sought to lead the world in internet regulation throughout the past decade. 2016 saw the adoption of the GDPR, which has served as a standard for more than 100 countries. When it came into force, companies such as Microsoft, Google and Facebook were forced to apply EU privacy standards worldwide — a typical case of the “Brussels Effect”.
The EU then introduced additional laws to clamp down on big tech companies, such as the Digital Services Act, which obliges platforms to police illegal content. The Law on Artificial Intelligence was the latest major initiative by Brussels for a pioneering regulation of the risks of this emerging technology.
But shortly after these regulations were adopted, Trump took office and repealed the AI safety rules that his predecessor, Joe Biden, had adopted. Since then, members of Congress have incorporated it into the annual Act
on National Defense a wording that directs the federal government to block AI regulation at the state level.
AI in the US is already less heavily regulated than in Europe and China — but it may soon become even less regulated. Silicon Valley tech giants argue that the fewer regulatory hurdles they face, the faster they can grow and turn a profit, which they see as beneficial for both the companies themselves and the country.
