Europe Retreats on Tech Regulation: GDPR and AI Act Face Major Rollbacks Under Industry Pressure

Reviewed byNidhi Govil

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The European Commission proposes significant changes to its landmark GDPR privacy law and AI Act, including simplified cookie banners and delayed AI regulations, marking a major shift from Europe's traditionally tough stance on tech regulation.

European Commission Proposes Major Tech Regulation Rollbacks

The European Commission announced sweeping changes to its tech regulatory framework on Wednesday, proposing significant rollbacks to both the General Data Protection Regulation (GDPR) and the AI Act. The moves represent a dramatic shift from Europe's traditionally aggressive stance toward Big Tech regulation, coming after months of intense lobbying from major technology companies and pressure from the Trump administration

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Source: France 24

Source: France 24

The proposed "Digital Omnibus" package includes simplifying the notorious cookie permission pop-ups that have become synonymous with European web browsing, allowing users to give consent with one click and save preferences across browsers. More significantly, the changes would permit tech giants like Google, Meta, and OpenAI to use Europeans' personal data to train their AI models

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AI Act Implementation Delayed Under Industry Pressure

Perhaps most notably, the Commission proposed delaying stricter AI regulations for high-risk applications until December 2027, pushing back the original August 2026 timeline by over a year. These delayed rules cover AI use in biometric identification, road traffic applications, utilities supply, job applications, health services, creditworthiness, and law enforcement

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Source: FT

Source: FT

The AI Act itself has faced significant implementation challenges since its passage in December 2023. Originally designed as a risk-based approach to AI regulation, the legislation was hastily rewritten to include rules for general-purpose AI models like ChatGPT after the technology's explosive popularity. This rushed inclusion has created what critics describe as a "chaotic implementation" that has turned the Act from a symbol of European leadership into a cautionary tale

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Privacy Advocates Denounce Changes as "Attack on Digital Rights"

The proposed changes have sparked fierce opposition from privacy campaigners across Europe. Austrian privacy advocate Max Schrems, known for his legal battles against Meta over privacy violations, called the proposals "the biggest attack on European's digital rights in years." Schrems argued that the reforms appear primarily designed to remove obstacles preventing AI companies from using personal data, warning that politicians are "throwing protections out of the window" in pursuit of an "AI race"

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Johnny Ryan, director of the Enforce unit at the Irish Council for Civil Liberties, criticized the changes as likely to "entrench the dominance of US and Chinese digital giants" rather than helping European companies compete. Ryan argued that Europe's problem isn't excessive regulation but rather the failure to enforce existing rules effectively

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Source: CNET

Source: CNET

Political and Economic Pressures Drive Regulatory Retreat

The Commission's reversal comes amid mounting pressure from multiple sources. The Trump administration has been pushing for reduced regulatory burdens on US tech companies operating in Europe, while high-profile figures like former Italian Prime Minister Mario Draghi have urged the bloc to weaken tech regulation to boost economic competitiveness

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Europe's struggle to develop credible competitors to US and Chinese AI giants has intensified these pressures. With very few exceptions, European companies have failed to emerge as serious contenders in the global AI race dominated by companies like DeepSeek, Google, and OpenAI

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Executive Vice President Henna Virkkunen framed the changes as "a face-lift with targeted amendments that reflect how technology has evolved," emphasizing the goal of encouraging AI development while maintaining high standards

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The proposals now face debate and votes from European countries, with significant political opposition expected given the GDPR's status as a cornerstone of European tech policy

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