The EU’s Tech Regulation Paradox is Getting Harder to Ignore

Mark Scott is a Contributing Editor at Tech Policy Press.

BRUSSELS — The European Union is having a Jekyll and Hyde moment on tech.

In the corridors of power within the 27-country bloc, two competing philosophies are vying for supremacy just as digital policy has become central to global geopolitics between Europe, the United States and China.

The EU has committed itself to a deregulatory agenda — epitomized by Mario Draghi’s 2024 competitiveness report — that aims a bazooka at once-sacred cows like the Artificial Intelligence Act and General Data Protection Regulation to reduce red tape and jumpstart Europe’s sluggish economy.

Yet Brussels also continues to commit itself to new digital legislation, most notably the recent EU Kids Act proposals and the upcoming Digital Fairness Act, that represent the bloc’s traditional regulate-first philosophy.

Confusingly, both of these opposing forces are playing out, in real time.

During the recent State of the EU speech, European Commission president Ursula von der Leyen name-checked both the push for deregulation and the new round of digital rules.

First, she boasted that “our 12 omnibus proposals are reducing the administrative burden by around €17 billion a year,” in reference to a series of red-tape-cutting initiatives, including those targeted at digital rules. Then, minutes later in the same speech, von der Leyen announced the EU Kids Act, telling lawmakers: “It is we who decide our rules, not Big Tech.”

For EU officials, this perceived contradiction — in which the bloc wants to cut digital regulation while also proposing new legislation — is not a contradiction. They point to how many of the new proposals, including the EU Kids Act and Digital Fairness Act, are aimed at simplifying oversight, especially for small businesses.

Under this worldview, the new legislation supports Draghi’s simplification agenda, and the review of landmark laws like the EU’s Digital Markets Act and Digital Services Act is an opportunity to pare back oversight that may become too burdensome.

That may be an argument that holds water inside the Berlaymont Building. But for those outside the European Commission’s headquarters, Brussels’ love-hate relationship with digital regulation can come across as muddled — even confusing — just when European citizens overwhelmingly support tough rules for tech.

In Brussels’ digital policy circles, the European Commission’s logic is under fire from both directions. Consumer and digital rights groups say the so-called Digital Omnibus is deregulation dressed as simplification. The tech industry has also turned the EU’s simplification agenda into a weapon to attack its new legislative proposals, including framing the EU Kids Act as duplicative regulatory oversight already built into the bloc’s existing rulebook.

Europe’s leaders find themselves caught between two seemingly opposing priorities.

Confronted with unprecedented spending on AI, particularly from US tech giants, many national leaders and EU officials believe Europe must pare back strict oversight of this emerging technology or face being left behind.

Currently, the bloc is home to roughly 5 percent of the world’s AI compute power compared to 75 percent of the global total from the US. Postponing parts of the AI Act — in part because the technical standards necessary to enforce the bloc’s comprehensive rules were not ready — was seen as essential by European leaders to give Europe a fighting chance of creating firms to compete globally with the likes of OpenAI or China’s DeepSeek.

At the same time, von der Leyen, the European Commission president, is under intense pressure from EU national capitals to act on perceived online harms associated with children.

Ahead of the EU Kids Act, several countries like France, Spain and Greece had proposed their own versions of social media bans for kids. Those efforts were driven by the perception that Brussels was not acting fast enough on a digital policy topic that has garnered widespread support, at least with adults.

Von der Leyen is half-way through her second term in Brussels, and she is a savvy political operative. Faced with growing vocal anger — and opposition to children’s online safety — from national capitals, the German politician fast-tracked an expert panel to review her options before pulling the trigger on the EU Kids Act.

That represents a realpolitik move by a European politician who has centralized her power during her second five-year stint at the top of the European Commission.

Von der Leyen has been a vocal advocate for deregulation to boost economic growth. But the German politician also knows she must keep EU national leaders happy if she wants to pursue her wider political agenda before her term ends in 2029.

That has left a level of ongoing confusion within Brussels about the European Commission’s end-game when it comes to its digital policymaking agenda.

EU officials have doubled down, for instance, on regulatory enforcement, including recent online safety preliminary findings against TikTok and Meta under the DSA, respectively. But they also have committed under existing legislation to review those same rules, most likely in early 2027, to ensure they don’t create overly burdensome oversight.

That dichotomy — where Brussels pursues both a deregulatory agenda and new legislative proposals — is almost certainly going to become the norm as the current European Commission enters the second half of its five-year term.