What’s Behind Europe’s Push to “Simplify” Tech Regulation?

Europe’s role as a global ‘super-regulator’ of tech—from the General Data Protection Regulation (GDPR) to the AI Act—has long defined its leadership in digital governance. But now, under the banner of ‘simplification,’ the EU is moving to streamline its regulatory framework, prompting concerns that it could water down hard-won protections.

Recently, the European Commission has shelved draft rules on AI liability, launched a wide-ranging review of key digital laws—including the GDPR—and is promising to streamline existing consumer protection laws to support innovation and boost competitiveness. While details are still emerging, this simplification drive is expected to include changes to how rules apply to smaller firms, efforts to reduce administrative burdens, and ensure regulatory coherence.

At first glance, this may appear to be bureaucratic housekeeping. However, this shift occurs amid mounting political pressure, both within Europe and abroad. In Europe, thirteen member states have signed a declaration calling for the removal of barriers and the simplification of EU rules and procedures. They emphasized the need for a “reviewed digital rulebook” that is “deregulated where possible” and avoids “unnecessary red tape.” The push comes amid growing anxiety over Europe’s economic position in the global tech race, with the US and China dominating AI and tech infrastructure.

To better understand the motivations behind Europe’s push for regulatory simplification, Tech Policy Press spoke with experts in competition policy and digital regulation. While most of these experts acknowledge that the European regulatory framework can be complex and burdensome—especially for smaller firms—there’s broad skepticism that deregulation alone will make Europe more competitive. In fact, some argue that it could have the opposite effect, reinforcing the market dominance of large global tech companies while undermining Europe’s own values regarding data protection, accountability, and trust.

Experts include:

• Giovanni De Gregorio, PLMJ Chair in Law and Technology at Católica Global School of Law and Católica Lisbon School of Law, and a co-editor of The Oxford Handbook on Digital Constitutionalism (forthcoming from Oxford University Press);
• Alexandre de Streel, Academic Director of the digital research program at CERRE and Professor of European law at the University of Namur;
• Paul de Hert, Professor of Law at Vrije University Brussels;
• Aline Blankertz, Tech Economy Lead at Rebalance Now;
• Claes de Vreese, University Professor of Artificial Intelligence and Society at the University of Amsterdam; and
• Max von Thun, Director of Europe and Transatlantic Partnerships at the Open Markets Institute.

Europe’s Innovation Problem Isn’t Just Regulation

Critics frequently point to the EU’s digital regulations as barriers to innovation, but many experts argue this is a misdiagnosis. Much of the criticism gained traction following a landmark competitiveness report by former Italian Prime Minister Mario Draghi, which warned that Europe’s complex regulatory environment was hindering its ability to keep pace with the US and China. Draghi singled out the AI Act and the GDPR, arguing that “the EU's regulatory stance towards tech companies hampers innovation.”
Some argue that the way Europeans define "competitiveness" is part of the problem.

Aline Blankertz

The Draghi report expressed concerns, especially from businesses, and emphasized the importance of "competitiveness," where competitiveness is an undefined catch-all term that gives businesses more space to act as they wish.

Increasingly, regulations—whether aimed at addressing environmental impacts or upholding human rights across supply chains—are portrayed as barriers to innovation. But this overly generalized characterization overlooks the fact that such regulations, including those in the tech sector, were designed to guide innovation toward reducing harm and risk.

Others argue that the problem isn’t regulation itself, but how it’s framed—and misunderstood.

Paul de Hert

There’s a constant background melody in Europe: make more laws and argue it’ll help innovation. But GDPR isn't what's stifling innovation. Accountability does involve paperwork—and yes, that can feel like red tape—but it's a core principle of responsible governance.

Even from a market-oriented perspective, the focus on regulation may miss the real drivers of innovation.

Alexandre de Streel

If regulation were the key determinant of innovation, then Silicon Valley wouldn’t be in California—one of the most regulated states in the US. The main driver—or the main brake—to innovation is not regulation. It’s other things: capital markets, attitude to risk, and the single market.

Giovanni De Gregorio

In Europe, we have been talking more about innovation, but we overlook structural issues which are not only related to overregulation. Startups move to or leave Europe not just because they struggle with regulation and bureaucracy—they struggle because, on the one hand, there’s less private investments and venture capital, and, on the other hand, internal market barriers and restrictive rules on state aid do not allow European champions to scale, thus calling for an European approach to industrial policy.

Europe’s Fragmented Regulatory Landscape

Beyond the perception of overregulation, many experts point to deeper structural weaknesses as the true obstacles to innovation in Europe. What’s really holding back European companies, they argue, isn’t the number of laws — it’s the lack of harmonization, fragmented markets, and underpowered capital ecosystems.

Around 2015, the EU began to take digital policy more seriously, launching the European Digital Market Strategy. At the time, its approach was largely vertical—regulating issues like copyright, privacy, and competition in separate, sector-specific silos.

That changed when Ursula von der Leyen became President of the European Commission in 2019. Her Digital Decade agenda elevated digital policy to a political priority, embedding it within broader concerns around fundamental rights, markets, and European values.

Giovanni De Gregorio

Over the last decade, digital went from a niche policy area to a central pillar of European strategy. The Commission’s approach changed significantly—starting with vertical, sectoral rules like the Copyright Directive, and moving toward horizontal frameworks like the DSA and AI Act, which aimed to tackle platform power, algorithmic accountability, and digital fairness at scale.

Yet despite the momentum, Europe’s regulatory environment remains fragmented. National interpretations of EU law, overlapping enforcement authorities, and inconsistent market rules continue to limit the ability of firms to scale.

Max von Thun

The European market is significantly more fragmented than, for example, the US market or even the Chinese market. We still have 27 different member states with their own national regulatory regimes, generally with national capital markets rather than a European one. If you’re a technology company, it’s just much harder to grow and scale across the continent… You need to operate in countries with different languages and regulations.

This patchwork has made enforcement unpredictable, and has allowed regulatory capture or “regulatory affinity” to shape how industries interact with policymakers.

Giovanni De Gregorio

The problem with Europe’s digital strategy isn’t just that it’s over-regulated or under-regulated—it’s that there has been no real strategy. We have created a regulatory patchwork that is hard to interpret and even harder to enforce. Different laws tend to overlap while assigning enforcement to different authorities—some national, some supranational. That lack of coordination creates real problems, especially when you look at how something like the GDPR interacts with the DSA.

Aline Blankertz

In tech regulation, it’s true that many overlapping rules were created around the same time—some of which are fairly ineffective, like the Data Governance Act, while others are not fully coherent. For instance, the AI Act includes a loophole for vaguely defined open-source AI models, which ultimately benefits the very firms that the Digital Markets Act aims to constrain.

This complexity, according to the experts, makes it challenging for businesses, especially smaller firms, to understand which rules apply to them.

Industry Capture & the Risk of Opening Up Rules

Rather than viewing regulation as a barrier, many argue it should be retooled to actively support innovation—especially for startups and small firms. Several interviewees warned that a broad "simplification" agenda could backfire, enabling large tech firms to consolidate power instead of creating space for smaller players to grow.

There is growing concern that what’s being framed as “simplification” is, in practice, a push to weaken key tech laws—most notably the AI Act and the GDPR.

Aline Blankertz

Simplification is a slight misrepresentation of what many policymakers are pushing for: We see a strong push to weaken both the AI Act and the GDPR. This is not to say that either regulation is perfect and there are certain improvements to be made. But as the narrative shifts toward growth and competitiveness, it’s getting increasingly difficult to defend the parts of these laws that are meant to constrain harmful business activity.

Max von Thun

‘Simplification’ becomes a code word for deregulation—and that’s where the problem lies. Trade bodies representing the biggest corporations are dominating this discussion. Making compliance easier for small businesses—streamlining reporting, reducing duplication—is fine. But don’t gut the rules. Instead of focusing solely on deregulation, Europe should ensure that the voices of smaller businesses and civil society are also heard in policymaking.

Alexandre de Streel

‘Simplification’ shouldn’t mean reducing regulation to the point where it allows big players to dominate, but rather it should make it easier for small innovators to navigate and thrive. Well-designed rules should level the playing field, enabling smaller firms to compete without being burdened by unnecessary regulations. The Digital Markets Act is a good example—it targets dominant players while creating fairer conditions for smaller ones to thrive.

Experts noted that industry lobbying, geopolitical competition, and concerns about regulatory effectiveness all play a significant role in shaping this debate. They pointed out that pressure from both industry and geopolitics often reinforces one another, with European firms emphasizing their disadvantages compared to US companies—citing more liquid capital markets and lighter regulatory burdens—or Chinese firms, which benefit from strategic industrial policies.

Claes de Vreese

The new geopolitical reality, combined with the evolving relationship between big tech and political power in the US, creates an unprecedented cocktail. The EU is still figuring out how to respond to this. Tech sovereignty is not realised overnight, and in any scenario, an EU response to the changed situation is needed in the short term. A discussion about ‘simplifying’ regulation is a de facto push for deregulation.

Giovanni De Gregorio

Reopening some policy conversations could also be beneficial to revise regulatory frameworks designed and debated in a different digital landscape. Nonetheless, considering the closeness between public and private actors in digital regulation, we cannot underestimate the potential risk that this process is driven by market interest, also taking into account the global scenario. Therefore, transparency and participation are key in this process.

Need for Coordination and Strategy

Experts emphasize that Europe must resist the temptation to mimic the US deregulatory approach. Rather than dismantling existing protections in pursuit of competitiveness, Europe should double down on its regulatory philosophy—one grounded in democratic values, consumer protection, and fair market conditions.

Giovanni De Gregorio

If Europe wants to compete globally, it needs more than new regulations—it needs investment, coordination, and a real strategy for innovation. Simplification without a roadmap risks wasting years of effort and undermining legal certainty.

The key challenge, they contend, is not just the design of regulation, but its coordination and implementation. Over the past decade, the EU has introduced landmark digital laws—from the Digital Markets Act (DMA) and Digital Services Act (DSA) to the AI Act and the European Media Freedom Act (EMFA). These legislative efforts represent a significant investment in shaping the digital future. But implementation now requires a concerted strategy. De Gregorio adds:

Europe has poured time, money, and political capital into digital regulation. The priority now should be to coordinate what we already have, especially among enforcement authorities, rather than just adding more laws or scrapping existing ones.

Other experts caution against placing blind faith in deregulation or techno-solutionism as a response to geopolitical uncertainty. While current tensions—including concerns over US political volatility—have reignited calls for European "digital sovereignty," there is a risk of overcorrecting through unfocused deregulation or techno-nationalist investment strategies.

Aline Blankertz

The current geopolitical climate of fear and confrontation is likely to increase the willingness to take action and has already increased the willingness to commit very high levels of defense spending across the EU. Hence, it is possible that governments will also be willing to invest more in digital technologies. However, it is quite likely that, given the state of digital infrastructures across the EU, investments will ultimately benefit the largest companies.

The growing uncertainty around the deregulatory agenda itself compounds this concern. Experts warn that the discourse is unstable and unresolved. Even as EU institutions debate competitiveness and simplification, it remains unclear whether the outcome will strengthen or weaken Europe’s digital strategy.

Claes de Vreese

The EU spent a decade devising a regulation for big tech. All along, there were battles over regulation versus innovation. This is a false dichotomy to start with, but whereas the EU was in the middle of implementing the many new regulations, more recent developments signal a less restrictive implementation. It is an open question what the very recent deregulation language will amount to.

In the end, Europe’s innovation challenge is not a simple story of too many rules—but of fragmented markets, strategic drift, and limited access to risk capital. As experts pointed out, well-crafted regulation can guide innovation in a direction that serves the public interest. But without coordination, clarity, and commitment, even the best rules risk becoming dead letters.