Important points
European lawmakers plan to ease some AI laws and other technology regulations to support innovation and competitiveness amid pressure from tech giants and the U.S. government. The European Commission’s proposed digital omnibus package includes delaying the implementation of the High-Risk AI Systems Regulation and deferring transparency penalties until 2027. The European Commission is also considering amendments to the GDPR to reduce regulatory burden and facilitate AI development within the EU.
European lawmakers are poised to ease some of the world’s toughest artificial intelligence (AI) regulations, just a year after hailing the AI Act as a global benchmark. The move comes amid growing pressure from tech giants, investors and the U.S. government, which warn that Europe’s regulatory zeal risks stifling innovation and undermining the region’s competitiveness in the global technology race.
The European Commission is preparing a series of amendments called a “digital omnibus” to simplify and postpone some AI laws and other technology-related laws, according to reports in the Financial Times, Reuters and POLITICO. The proposed changes could be announced as early as November 19, 2025, but will require further negotiations between EU member states and the European Parliament.
At the center of the debate is the AI Act of 2024, which bans the use of controversial AI such as social scoring and real-time facial recognition and imposes strict requirements on high-risk applications in areas such as healthcare, law enforcement and employment. These rules apply not only to companies within the EU, but to any company that provides AI products or services to European customers. The law also includes heavy fines for violations and broad transparency obligations for global technology companies.
However, the regulatory tide appears to be changing. As reported by Fortune, the European Commission’s “Simplification Agenda” aims to create a more favorable business environment by responding to a call for evidence launched in September 2025 to collect research on how to streamline data, cybersecurity and AI legislation. An anonymous EU official told the Financial Times that the city of Brussels is “engaging” with the Trump administration on possible adjustments to the AI Act and other digital regulations, reflecting a broader effort to reduce legislative burdens.
“The possibility of delaying the implementation of this part of the AI Act is still under consideration within the European Commission. Various options are being considered, but no formal decision has been taken at this stage,” European Commission spokesperson Thomas Renier told Fortune.
Draft documents obtained by Reuters and POLITICO suggest that several important changes are under consideration. Among them, companies with high-risk AI systems could be given a one-year “grace period” before enforcement begins, allowing companies already using such technology to make necessary adjustments without disrupting the market. Additionally, penalties for transparency violations, such as failing to clearly label AI-generated content to combat deepfakes and misinformation, could be delayed until August 2, 2027, giving companies and developers “sufficient time” to adapt to the new obligations.
The digital omnibus package also proposes to exempt companies from registering AI systems in the EU’s high-risk database if they are only used for narrow or procedural tasks. The European Commission claims these are “targeted simplification measures aimed at ensuring timely, smooth and proportionate implementation”, according to a draft document reviewed by Reuters.
But this change goes beyond the AI Act. As POLITICO has revealed, the European Commission is also considering far-reaching changes to Europe’s main privacy law, the General Data Protection Regulation (GDPR), to further benefit AI developers and reduce regulatory red tape. The stated aim is to strengthen business competitiveness and maintain Europe’s position as a global technology powerhouse.
The push for simplification comes amid intense criticism from industry leaders and investors. Fabricio Broisi, chief executive of Prosus, one of the world’s biggest tech investors, warned at an event in London that the UK and Europe are “losing the innovation game”. According to the Times, Broisi argued that European rules prioritize regulation over commercial concerns and are filled with too much bureaucratic red tape, making it “difficult to get new things off the ground.” “We’re losing, and we’re even creating regulations that will slow things down even more,” he said.
Broisi’s complaints were not merely theoretical. In February 2025, Prosus acquired Just Eat for €4.1 billion, but had to write down its €1.6 billion stake in Delivery Hero to meet Brussels’ competition concerns, a process he described as an example of excessive bureaucracy. Despite these obstacles, Prosus continues to see opportunities in Europe, with nearly $20 billion in investment planned and the goal of growing the continent’s first multi-trillion dollar technology business. The company reported strong financial results for 2025, with revenue up 13% to $6.2 billion and adjusted EBIT jumping to $443 million from $38 million a year ago.
Technology companies, from startups to giants like Apple, Meta and Alphabet, are also sounding the alarm over the complexity and compliance costs of AI laws. They argue that the law’s broad definition of “high-risk” AI could discourage experimentation and make it difficult for small developers to compete. Meta and Alphabet Inc. have warned that the law could stifle innovation by creating bureaucratic hurdles and high compliance costs, according to Fortune.
Criticism is not limited to industry insiders. The Trump administration has repeatedly expressed concerns about Europe’s regulatory approach. At the Paris AI Summit earlier this year, US Vice President JD Vance publicly warned that “overregulation” of AI in Europe could cripple the emerging industry. The US government has advocated for a lighter touch, arguing that innovation should be prioritized, especially as the global AI arms race intensifies with China. Most of the U.S. AI regulations are enacted at the state level, with California leading the way with strict rules for emerging technologies.
Europe’s regulatory ambitions are even causing diplomatic friction. President Trump has threatened to raise tariffs on countries that “discriminate” against U.S. technology companies, raising the stakes further as EU policymakers weigh the risks and benefits of that approach.
Not everyone is against regulation. Broisi acknowledged that some regulations, such as the Internet Safety for Children Act, are helpful. But he warned that well-intentioned regulation could have the “unintended consequence” of cementing the dominance of American tech giants. “A lot of people weren’t paying attention to European technology at all. To me, this is ridiculous, because this is a huge opportunity,” he said, expressing hope that with the right balance Europe can develop its own world champions.
As the digital omnibus deadline of November 19 approaches, all eyes are on Brussels. The outcome will not only shape the future of AI and innovation in Europe, but also the continent’s place in an increasingly competitive digital world. It remains to be seen whether the proposed changes are enough to satisfy critics and still protect European values.
The EU is currently at a crossroads, maintaining a delicate balance between protecting its citizens and deploying the next wave of digital innovation.
