Key takeaways included: telecoms reform (DNA), calls for deeper GDPR reform, a pause on AI Act high-risk rules, "Buy European" procurement, and faster merger reform.
ADVERTISEMENT
The European Commission on Monday held a high-level conference to review the Commission's progress in implementing the recommendations set out in Mario Draghi's report on the future of European competitiveness.
Although Commission President Ursula von der Leyen has rightly said that “only what gets measured gets done”, we have not found concrete tables comparing Mario Draghi’s outlined proposals, the Competitiveness Compass timelines, and the actual results of this report - only vague infographics and references to actions the Commission has “begun” working on.
#1 Digital Networks Act
In his speech, Mario Draghi did not explicitly mention the Digital Networks Act, but he alluded to a “major telecoms reform”* expected by the end of the year, likely a reference to the DNA.
The scope of the DNA remains unclear, and negotiations among Member States are expected to be difficult, particularly given the EU-US trade deal, which restricts the introduction of network fees. Whether new “IP interconnection dispute resolution mechanisms” will be included in the DNA is still uncertain, though we suspect they will.
In some areas, Europe shows progress. A major telecoms reform is expected by year's end.
#2 The need for a more ambitious GDPR reform
Mario Draghi rightly diagnosed the problems with GDPR application among Member States, noting that the GDPR has raised the cost of data by around 20 per cent for EU firms compared to their American counterparts.
He modestly criticised the current GDPR reform approach, which remains focused on “easing record-keeping and extending SME derogations to mid-caps”, hinting at the previous Simplification Omnibus and Danish Presidency’s plans for GDPR simplification.
Draghi overlooked only one point: GDPR reform is critical not just for AI companies, but for all data-driven businesses in the EU. No new strategies (see: the EU Data Union Strategy) or tweaks to open data frameworks will suffice if the GDPR continues to serve as an excuse for gatekeeping data.
So far, the Commission has insisted that the GDPR “will not be reopened”. Yet, to rephrase President von der Leyen, there can be no “business as usual,” otherwise, Europe’s ambition to foster its own champions risks remaining just another ambition on paper.
Across European companies, one of the clearest demands is for a radical simplification of GDPR—not just the primary law but the heavy gold-plating by Member States. Training AI models requires vast amounts of public web data. Yet legal uncertainty over its use creates costly delays, slowing deployment in Europe.
Research backs this up: GDPR has raised the cost of data by about 20 per cent for EU firms compared with US peers. Yet the only change on the table so far is an easing of record-keeping and extending SME derogations to mid-caps. Broader reform toward simpler, harmonised rules is still vague.
#3 AI Act: no criticism of codes of practice, but a call to pause rules for high-risk systems
Building on his past remarks about overregulation hampering European tech innovators’ ability to scale, Draghi also commented on the AI Act.
Yet, while he rightly diagnosed the negative impact of the GDPR on European companies, he did not examine in depth the GPAI Code of Practice and its impact on AI developers’ ability to use data to train their models, nor how it impacts regulatory certainty for European companies, noting only that “codes of practice <...> have clarified responsibilities”.
The AI Act is another source of uncertainty. The first rules—which included the ban on “unacceptable-risk” systems—landed without major complications. Codes of practice signed by most major developers, together with the Commission’s August guidelines, have clarified responsibilities.
Further, he called for a pause in the AI Act’s implementation for high-risk systems such as critical infrastructure and health.
But the next stage—covering high-risk AI systems in areas like critical infrastructure and health—must be proportionate and support innovation and development. In my view, the implementation of this stage should be paused until we better understand the drawbacks.
#4 Public procurement directive: Buy European
Mario Draghi also explicitly endorsed the forthcoming revisions to the EU Public Procurement Directives, led by Commissioner Stéphane Séjourné, noting that the EU should leverage the 14 per cent of GDP spent on public procurement to support European cloud services and vertical AI, echoing earlier calls to implement a “Buy European” approach.
<...> The potential is clear across many sectors: reserving an EU share in defence chip procurement; supporting European cloud and vertical AI; or setting quotas for clean- tech products such as green steel and aluminium. Work has begun on preferential EU procurement rules for the public sector, though details remain unclear.
#5 Easier merger rules
Draghi highlighted Europe’s fragmented industrial landscape, noting that, unlike the US and Asia, which benefit from scale and consolidation, Europe remains split among national champions.
He warned that waiting until 2027 to revise merger guidelines is too late, as “industry cannot wait”. These guidelines will be particularly important for the EU’s telecom sector, which has long advocated for easier mergers.
Europe should be able to protect competition while still promoting consolidation and innovation. A review of merger guidelines is underway, but the industry cannot wait until 2027—the deadline consistent with the procedure that was chosen
What we missed: evaluation on stronger governance, simplification, and better regulation
Although Draghi has often highlighted the burden of overregulation and the need for stronger governance, he chose not to stress the Commission’s work in this area during his speech. Whether he omitted these points due to time constraints or in the interest of speed remains unclear.
His original report set out concrete governance proposals, including: appointing a Vice-President for Simplification to streamline the EU acquis and coordinate a new 'evaluation bank' to stress-test regulations; adopting a single methodology to quantify the cost of new legislation for EU institutions and Member States; and reviewing the Commission’s system of Expert Groups.
Greater focus on measuring the impact of new legislation and improving transparency could significantly improve the EU’s competitiveness. Draghi had previously urged the Union to “do fewer things better,” prioritising areas of real European added value while leaving more leeway to Member States and the private sector in line with subsidiarity.
This article was originally published on EU Tech Loop as part of an agreement with Euronews.
