Fewer rules, more innovation? The miscalculation of the new Brussels

Regulating less or regulating better?

In her interview with Agenda Pública, Ana Gallego, Director-General for Justice and Consumers at the European Commission, argues that the European Commission is not deregulating, but rather “learning to regulate better”. The core of the rights, she says, remains intact, rather what is being reviewed are procedures, administrative burdens and formalities that can be simplified.

The argument could be convincing but, beyond the surface, the broader context in which this review is taking place matters. This is not an isolated reform: the Digital Omnibus is part of a series of packages that, under the banner of competitiveness, are reviewing rules in various areas, from corporate responsibility to the environment, weakening safeguards for people and the planet. When this logic becomes cross-cutting, it ceases to be technical and becomes political.

In the digital sphere, the timing is not neutral. The pressure to “keep up” in artificial intelligence (AI) has created a climate of urgency, a certain European AI FOMO (fear of missing out). The implicit message is that any regulatory brake could cause Europe to lose the race to the United States or China.

Beyond technical adjustments

But this narrative oversimplifies the problem. Europe’s lack of competitiveness cannot primarily be explained by the existence of data protection rules or transparency obligations. It is driven by structural factors such as market fragmentation, difficulties in accessing financing for scaling up, technological dependence, investment gaps, and the absence of European industrial champions in digital infrastructure. Added to this is a history of public investment policies that have sometimes prioritised risk reduction for private actors over the development of digital capabilities and infrastructure oriented toward the public interest.

To assume that easing obligations related to fundamental rights – especially without respecting established procedural safeguards – will solve this deficit is a weak assumption.

Furthermore, it is worth asking who really benefits from regulatory flexibility. In today’s digital ecosystem, the actors that concentrate large volumes of data and computing power are not small and medium-sized European companies. Rather, they are global platforms and conglomerates with infrastructure, capital, and legal teams capable of navigating regulatory complexity and ambiguity.

When traceability, documentation or transparency requirements are reduced, these dominant players are precisely those best able to adapt, not the start-ups trying to enter the market, nor the SMEs seeking to compete on a level playing field. The Commission argues that simplification benefits small businesses. The objective is understandable. But there is an obvious risk: that, in practice, it will consolidate the competitive advantages of those who already control data flows and AI infrastructures.

Europe’s regulatory model

Rules do not only impose limits. They also structure the market. They define how information is distributed, who takes risks and who is accountable. Reducing obligations under the promise of greater agility may seem pragmatic. However, if those obligations were precisely what allowed visibility and control, the balance shifts.

For years, the European Union has built a regulatory identity based on the idea that the protection of rights is not an obstacle to innovation, but rather a condition of its legitimacy. This position has generated social trust and legal predictability. This trust should be seen as an economic asset. If the framework is now reconfigured under pressure from the race for AI, the risk becomes both legal and strategic. Europe may end up competing on the same playing field as others, instead of reinforcing what set it apart.

It is important to recognise that Member States are not immune to these risks. The Spanish State itself has promoted initiatives in the field of algorithmic supervision and digital governance based on the recognition that digital technologies have profound social impacts. There is an awareness that the problem is not only to accelerate adoption, but also to manage its consequences.

What kind of world does Europe want?

In this context, presenting the Digital Omnibus as a mere procedural adjustment is insufficient. It is not a question of sanctifying bureaucracy or denying that certain burdens can be reviewed. It is a question of understanding that, in the digital sphere, transparency and accountability mechanisms are not formalities. They are the tools that enable individuals, authorities and competitors to know what is happening.

The real debate is not simplification versus regulation. It is what model of digital development the EU wants at a time of geopolitical pressure. It can choose to reinforce its commitment to high standards that generate trust and long-term market growth. Or it can let the fear of falling behind reorder its priorities and progressively shift the balance between rights and the market.

This shift does not happen overnight. It arises cumulatively, through adjustments that, taken in isolation, seem minor. That is why the debate deserves more than just rhetorical reassurance. It deserves a frank discussion about what kind of Europe we want to build in the era – or rather the bubble – of artificial intelligence.

This editorial was originally published in Spanish in Agenda Publica on 2 March 2026.