The European Union is about to postpone the implementation of some of its strictest artificial intelligence regulations by over a year. As a result, the debate has been quite intense on one side we have tech companies lobbying for more leniency, and on the other hand, civil society groups that accuse Brussels of being influenced by Big Tech and geopolitical factors.
On Wednesday, the European Commission revealed its extensive new “Digital Omnibus” proposal – a reform package designed to ease the complexity of Europe’s AI, privacy, and data-governance laws labyrinth. The proposal still needs to be discussed and approved by member states and the European Parliament, but the Commission reactions to it have been very intense already, both in the political and tech worlds.
The core of the commission’s plan is to delay the prohibition of AI employed in “high-risk” areas of biometric identification, the police, healthcare, utilities, credit scoring, etc. from August 2026 to December 2027. The reason for the delay is that there are concerns that EU companies are not competitive enough in technologies like AI models and semiconductor manufacturing compared to their US and Asian counterparts.
“Up until now, Europe has not fully benefitted from the digital revolution,” stated EU Economy Commissioner Valdis Dombrovskis while stressing the importance of remaining competitive. “We cannot afford to pay the price of catching up with the changing world.”
A push to loosen data rules
The Digital Omnibus is also intended to clarify when data is no longer “personal” under the EU’s General Data Protection Regulation (GDPR), thus allowing companies to more easily utilize anonymized data for AI training. More controversially, the draft could allow a larger number of data-based uses for the likes of Google, Meta, OpenAI, and Amazon by European citizens’ data being used to train AI systems, subject to safeguards.
The Commission maintains that such changes will facilitate compliance and lessen the burden on businesses that will be more able to compete globally while still upholding the core privacy protections. Siemens and SAP, among other companies, have been vocal in urging Brussels to revise the AI Act, warning that too stringent regulations could suffocate European innovation.
Ahmed Baladi, partner at law firm Gibson Dunn, called the initiative a balancing act. “The commission seems to be aiming at simpler, more foreseeable rules that reduce the contact with innovators and at the same time keep the core EU safeguards,” he told Reuters.
The Omnibus touches upon various regulatory areas, e.g., the AI Act which has been in force since last year, GDPR, the e-Privacy Directive and the Data Act, making it one of the most significant regulatory changes the bloc has attempted in years.
Tech industry welcomes changes, but wants more
The tech lobbying group CCIA Europe, whose members are Alphabet, Meta, and Apple, was positive about the proposals as “a step forward” but believed that the reforms were only a small part of the broad modernization that the industry was seeking. Also the financial services sector, through the Association for Financial Markets in Europe (AFME), described the initiatives as beneficial but not sufficient.
If adopted, the Omnibus would also relax the conditions for the introduction of AI by those classified as “high-risk.” According to the draft, companies would be exempted from registering such systems in the EU’s official database if the tools are used solely for narrow or procedural tasks. The rules that regulate cookie pop-ups—the source of frustration for both companies and consumers for a long time—would also be simplified.
Nevertheless, the package needs to secure the support of the European Parliament, where privacy-focused MEPs are likely to oppose it. Brando Benifei, a primary negotiator of the AI Act, said that the Parliament must “keep on defending citizens’ digital rights.”
Consumer groups sound alarm over ‘Rollback’
One can see a sharp negative reaction from privacy organizations and civil liberties groups to the proposal. Max Schrems from the privacy advocacy group noyb, which is famous for its legal confrontations with Meta, warned that the reforms could lead to the exploitation of data on an unprecedented scale.
“At this point, all your data are integrated into the algorithms of Meta, Google, or Amazon,” Schrems pointed out. “This allows AI systems to get even the most intimate information of the users thereby making them more vulnerable to manipulation.”
In a letter addressed to the public, 127 civil organizations, dubbed the changes as “the most significant rollback of EU digital rights ever.” On Wednesday, activists protested all over Brussels, they brought mobile billboards and hundreds of posters with the slogan “Stand up to Big Tech and the Trump administration, Mrs. von der Leyen” written on them and showed them to Commission President Ursula von der Leyen.
According to Dutch MEP Kim van Sparrentak, the Commission gave up: “Seeing the European Commission giving in after pressure from the Trump administration and Big Tech lobbies is rather disappointing.”
A delicate balancing act for Europe
EU antitrust chief Henna Virkkunen was of the opinion that the package proposal would be attacked by critics from all perspectives. “There will be many stakeholders saying this is not enough—and some saying it’s too much,” she said. “I think this is a balanced package.”
On the road to regain its competitive edge in AI, chips, and digital innovation, Europe is at a crossroads with the Digital Omnibus: can the bloc remain a global leader in setting standards for digital rights while at the same time not overstepping regulation that could hamper its own technological ambitions?