BRUSSELS—In a surprising shift, the European Union is proposing significant rollbacks to its flagship privacy and artificial intelligence regulations, aiming to bolster competitiveness in the global tech race. The European Commission unveiled draft changes this week that would ease restrictions under the General Data Protection Regulation (GDPR) and delay key provisions of the AI Act, responding to mounting pressure from U.S. tech giants and concerns over Europe’s lagging innovation.

According to documents obtained by Politico, the proposed ‘Digital Omnibus’ initiative seeks to simplify compliance for businesses while fostering AI development. This includes allowing companies like Google and Meta to use Europeans’ personal data for AI training with fewer hurdles, a move that has alarmed privacy advocates.

Pressure from Across the Atlantic

The revisions come amid warnings from incoming U.S. administration figures and industry leaders that stringent EU rules are stifling growth. As reported by The Verge, the changes would delay ‘high-risk’ AI rules until 2027, giving tech firms more time to adapt. ‘The EU is finally listening to reason,’ said a source close to Big Tech lobbying efforts, speaking anonymously.

Reuters highlighted critics’ concerns, quoting privacy activist Max Schrems: ‘This is death by a thousand cuts for GDPR.’ The proposals would narrow definitions of sensitive data and expand exemptions for AI training, potentially eroding core protections established in 2018.

Easing Data Rules for Innovation

Under the draft, pseudonymized data could be treated as non-personal in more cases, facilitating broader use in AI models. Reuters reports that this could allow firms to bypass some consent requirements, arguing it supports ‘innovation without unnecessary bureaucracy.’

TechPolicy.Press noted that the changes also target cookie tracking, simplifying pop-ups that have long frustrated users and businesses alike. ‘The goal is to make Europe more attractive for AI investment,’ an EU official told the outlet, emphasizing the bloc’s need to compete with the U.S. and China.

However, this pivot risks undermining the EU’s reputation as a global standard-setter in digital rights. As TechPolicy.Press journalist Ramsha Jahangir wrote, ‘The draft Digital Omnibus could weaken core data protections and give tech companies more leeway in using European data.’

Delays in AI Oversight

The AI Act, hailed as the world’s first comprehensive AI regulation when passed in 2024, faces postponements for its toughest elements. Provisions governing high-risk systems, such as those in healthcare and transportation, would not take effect until 2027, per Reuters.

This delay follows intense lobbying, with companies arguing that rapid enforcement could hamper development. Posts on X from industry watchers, including privacy expert Lukasz Olejnik, describe the changes as introducing ‘entity-relative definitions of personal data’ and ‘machine-readable consent signals,’ potentially reshaping compliance landscapes.

Industry Reactions and Criticisms

Big Tech has welcomed the proposals. A Meta spokesperson told Computerworld that the changes ‘strike a balance between protection and progress.’ Yet, advocacy groups are pushing back. ‘Brussels is knifing privacy to feed the AI boom,’ declared a Politico headline, capturing the sentiment among critics.

Politico obtained drafts showing eased rules for data processing in AI, including restrictions on user access rights to limit ‘abusive’ requests. This could reduce administrative burdens but raise barriers for individuals seeking transparency.

From X, sentiments reflect division: One post from Freedom Research warned that the EU is ‘sacrificing Europeans’ privacy for artificial intelligence,’ echoing reports of quiet rewrites to GDPR without broad consent.

Global Competitive Pressures

The backdrop is Europe’s struggle to keep pace in AI. While the U.S. boasts leaders like OpenAI, EU firms lag, prompting calls for deregulation. Deccan Herald reported on the ‘EU pivot from aggressive tech regulation,’ noting delays in AI Act provisions to address competitiveness concerns.

WebProNews detailed how the shift follows U.S. pressures, with proposals to ‘water down the AI Act and GDPR amid global pressures.’ This includes narrowing sensitive data scopes and expanding legitimate interest bases for AI, as per WebProNews.

Implications for Businesses

For industry insiders, these changes mean recalibrating strategies. Companies deploying AI in the EU may gain flexibility in data usage, but must navigate evolving enforcement. Biometric Update warned that the proposals ‘could rewire GDPR, water down tech regulations,’ especially in biometrics and surveillance tech.

PPC Land outlined specifics: ‘Narrowing sensitive data definitions, expanding AI training exemptions, and restricting data subject access rights.’ This could streamline operations for firms like those in blockchain and AI, as noted by PPC Land.

Yet, uncertainty looms. The European Commission’s call for evidence, as covered by Data Protection Report, invites feedback ahead of finalization, potentially altering the trajectory.

Voices from the Field

Experts like Luiza Jarovsky on X have tracked AI Act timelines, noting enforcement phases starting in 2024. Recent updates, however, introduce flux. ‘The most striking change are the entity-relative definition changes of personal data,’ tweeted Olejnik, highlighting technical nuances for compliance officers.

MediaNama’s X post questioned if the EU is ‘quietly watering down GDPR, the AI Act & ePrivacy rules under US pressure,’ pointing to leaked drafts suggesting limited transparency checks.

Looking Ahead in Regulation

As the Commission refines these proposals, stakeholders anticipate debates in the European Parliament. The AI Office’s recruitment drives, per artificialintelligenceact.eu, signal ongoing commitment to oversight, yet diluted rules may shift priorities.

Fasken’s analysis emphasizes interactions between the AI Act and GDPR, advising firms on risk levels and obligations. With deadlines like January 2025 for new AI Office roles, the landscape remains dynamic.

Ultimately, this regulatory rethink underscores the tension between innovation and rights, with Europe’s tech future hanging in the balance.