The European Union faces a fundamental tension in its approach to technology policy. Within the bloc's corridors, two opposing visions are competing for control precisely when digital regulation has become a flashpoint in global competition between Europe, the United States and China.
On one side sits a push toward deregulation, anchored by Mario Draghi's 2024 competitiveness report, which targets longstanding rules including the Artificial Intelligence Act and General Data Protection Regulation to reduce bureaucratic burden and revive Europe's sluggish growth. On the other sits a commitment to fresh digital legislation, particularly the EU Kids Act proposals and the forthcoming Digital Fairness Act, reflecting the bloc's traditional instinct to regulate first.
Both forces are unfolding simultaneously. During her recent State of the EU address, European Commission President Ursula von der Leyen articulated both strands. She highlighted that "our 12 omnibus proposals are reducing the administrative burden by around €17 billion a year," referring to red-tape initiatives touching digital rules. Moments later, she unveiled the EU Kids Act, declaring: "It is we who decide our rules, not Big Tech."
Commission officials reject the notion of contradiction. They contend that many new proposals, including the EU Kids Act and Digital Fairness Act, aim to streamline oversight rather than expand it, particularly benefiting smaller enterprises. From this perspective, fresh legislation reinforces Draghi's simplification drive, and reviews of landmark statutes like the Digital Markets Act and Digital Services Act represent chances to eliminate burdensome oversight.
This reasoning may persuade officials inside the Berlaymont Building, yet observers beyond Commission headquarters perceive Brussels' stance as contradictory and unclear, particularly given that European citizens broadly endorse stringent tech governance.
The Commission's approach faces criticism from multiple quarters. Consumer and digital rights advocates characterize the Digital Omnibus as deregulation disguised as streamlining. Technology companies have weaponized the simplification agenda against new legislative proposals, portraying the EU Kids Act as redundant oversight already embedded in existing law.
Caught Between Competitiveness and Protection
European leadership confronts a genuine dilemma. Witnessing extraordinary investment in artificial intelligence from American technology firms, numerous national leaders and EU officials believe Europe must relax strict oversight of emerging technologies or risk falling behind. The bloc currently commands roughly 5 percent of global AI compute capacity, compared to 75 percent held by the United States. European leaders deemed postponing portions of the AI Act—partly because enforcement standards were incomplete—as vital to enabling European firms to compete with entities like OpenAI or China's DeepSeek.
Simultaneously, von der Leyen faces mounting pressure from EU national governments to address perceived dangers to children online. Before the EU Kids Act announcement, countries including France, Spain and Greece had drafted their own social media restrictions for minors, driven by frustration that Brussels was moving too slowly on a topic commanding broad adult support.
Von der Leyen, midway through her second term, operates as a seasoned political strategist. Responding to escalating demands from national capitals regarding child safety online, the German politician expedited an expert review before launching the EU Kids Act—a pragmatic maneuver by someone who has consolidated authority during her second five-year period atop the Commission.
Von der Leyen has championed deregulation as a path to economic expansion. Yet she recognizes that maintaining goodwill among EU national leaders remains essential for advancing her broader political objectives before her tenure concludes in 2029.
This balancing act has generated persistent uncertainty regarding the Commission's ultimate intentions for digital policy. Officials have intensified regulatory enforcement, issuing recent online safety preliminary findings against TikTok and Meta under the Digital Services Act. Yet they have also committed, under current law, to reassess those same rules—likely in early 2027—to prevent excessively demanding compliance burdens.
This pattern of pursuing both deregulation and new legislation will probably define the Commission's approach as it enters the second half of its five-year mandate.
