European Union

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Written by Tristan Marcelin.

Following Mario Draghi’s report on the future of European competitiveness, the EU has started proposing ways to simplify EU laws governing the digital space. The goal is to reduce administrative burdens on companies. However, simplifying EU digital laws may not be sufficient to boost innovation, and thus competitiveness.

EU competitiveness as a new priority Future of European competitiveness

Following a request by European Commission President Ursula von der Leyen, Mario Draghi – former European Central Bank President – drafted a report in 2024 on the future of European competitiveness. In his report, Draghi suggests, among other things, increasing EU digitalisation and the development of advanced technologies to boost EU competitiveness. The report notes that the EU should develop its connectivity, computing infrastructures, and electronics value chain, as all three are essential for EU citizens and businesses. It also suggests a number of ways to strengthen EU governance, including by simplifying rules. It warns that ‘excessive regulatory and administrative burden can hinder the ease of doing business in the EU and the competitiveness of EU companies’. The unclear overlaps between the General Data Protection Regulation (GDPR) and Artificial Intelligence Act (AI Act) are given as an example.

New EU political priorities

Since the publication of the Draghi report, the European political landscape has changed. In 2024, a new legislative term started in the European Parliament, and a new College of Commissioners was appointed for the European Commission. The Commission’s new leadership chose competitiveness as one of its 2024‑2029 priorities, and laid down objectives including ‘making business easier’ and ‘boosting productivity with digital tech diffusion’ to achieve this goal. Both objectives follow Mario Draghi’s recommendations. The latter appears even more relevant in 2025, as this year’s Nobel prize in economic sciences was awarded to three economists for showing ‘how new technology can drive sustained growth’.

From strategic objectives to concrete proposals Digital simplification on the Council’s agenda

In a June 2025 document, the Polish Presidency of the Council noted its priority of simplifying digital regulations, listing the initiatives it undertook. The current Danish Presidency aims for a similar priority. The Danish programme notes that ‘the Presidency will place focus on regulatory simplification and better regulation in the EU to ease daily operations for businesses and other stakeholders’. Under Denmark’s Presidency, the Council defined its position on a Commission proposal, known as the ‘omnibus IV‘ simplification package, to reduce administrative burdens for small and medium-sized enterprises and small mid-cap enterprises (SMCs). The proposal includes modifications to the GDPR: SMCs would no longer need, under certain conditions, to maintain records of activities involving the processing of personal data.

Forthcoming proposal for a digital omnibus

An omnibus dedicated to the EU digital rulebook is reportedly expected for 19 November 2025. The call for evidence, published by the Commission on 16 September 2025, hints at an omnibus focusing notably on simplifying data legislation, cybersecurity incident reporting obligations, and the smooth application of AI Act rules. The forthcoming omnibus is aimed at reducing ‘the administrative costs for compliance for businesses, administrations and citizens in the European Union in application of several regulations of the Union’s digital acquis without compromising the objectives of the underlying rules’. It follows a period of intense political discussions over a pause or simplification of parts of the AI Act, owing to its difficult transposition into technical guidance and standards, and its interplay with other rules.

Burden of a fragmented EU digital rulebook Fragmented EU digital rulebook

The EU digital rulebook is composed of several pieces of legislation that all have different purposes and scopes. Among the horizontal digital laws, (i) several are related to data, while (ii) others focus on specific digital activities. The first include the GDPR, which has created rights for EU citizens over their data. Further laws such as the Data Act and the Data Governance Act set rules for private, public and non-personal data. The second include laws creating obligations for certain types of digital activities, such as the Digital Markets Act for practices relating to digital markets, the Digital Services Act for digital services, and the AI Act for AI systems and models. It also includes technical and organisational cybersecurity obligations relating to software, hardware and entities, such as the Cyber Resilience Act (CRA) and the NIS 2 Directive. In addition to the horizontal digital laws, sectoral laws may apply. For instance, in 2024, experts divided the 154 EU ‘information security’ and ‘cybersecurity’ policies (including non-legislative texts) into eight policy areas including energy, economic, education, and security and justice.

Administrative burden on companies

The administrative tasks companies must undertake to comply with EU laws depend on their activities. Companies handling personal data must comply with GDPR rules. Once enforced, companies distributing and manufacturing devices might need to comply with the CRA, and those providing general-purpose AI (GPAI) might need to comply with the AI Act. A company could need to comply with all three. However, each law has different deadlines, reporting procedures and authorities. The GDPR and the CRA are enforced at Member State level, while the exclusive power to enforce GPAI rules rests with the Commission. If a company provided high-risk AI systems instead of GPAI, enforcement would be at the national level. The GDPR, CRA and AI Act thus all rely on different enforcers. Depending on the law and its implementation, Member States may have added requirements on top of the initial EU law – this is known as ‘gold plating‘. The Draghi report associates it with a loss in competitiveness, mentioning the GDPR as an example: its enforcement is uneven among the Member States, limiting cross-border innovation.

Beyond simplifying the EU digital rulebook

While simplifying the EU digital rulebook is a first step, it is unlikely to be sufficient to boost EU innovation, and thus competitiveness. In 2024, Anu Bradford – known for theorising the Brussels effect, whereby the EU’s regulatory power influences other regions – published a research paper, ‘The False Choice Between Digital Regulation and Innovation’. As reported by the Oxford Institute for Ethics in AI, she ‘noted that there was very little technological regulation in Europe before 2010, at the time when the likes of Meta and Google have been founded. This suggests that regulation was not the major obstacle preventing the rise of similar companies in Europe.’ Experts often mention the absence of a digital single market and of a unified capital market in Europe as one of the root causes of the EU’s technological gap.

Read this ‘at a glance’ note on ‘Simplifying EU digital laws for competitiveness‘ in the Think Tank pages of the European Parliament.

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