EU Commission Launches Major Digital Simplification Package to Boost Competitiveness, Cut Red Tape and Support AI Innovation
#gdpr #ai #airegulation
The European Commission has unveiled a sweeping Digital Simplification Package aimed at cutting red tape, boosting Europe’s competitiveness, and accelerating the continent’s digital and AI innovation. Executive Vice-President Henna Virkkunen presented the measures alongside Commissioners Valdis Dombrovskis and Michael McGrath, stressing that Europe’s future economic growth depends on simplifying rules, scaling up access to high-quality data, and ensuring businesses can innovate faster across the Single Market.
The package introduces three central pillars: a new Data Union Strategy, EU-wide European Business Wallets, and the first-ever Digital Omnibus designed to simplify rules governing artificial intelligence, cybersecurity and data. Virkkunen said the package responds directly to demands from businesses—especially SMEs—calling for clearer, more predictable rules and less administrative burden. The Commission estimates that the business wallets alone could save companies €150 billion per year, while the omnibus cuts at least €5 billion in administrative costs by 2029.
The Data Union Strategy seeks to significantly expand the availability of high-quality data for AI development. It builds on the EU’s “AI Continent” and “Apply AI” action plans, focusing on data labs, synthetic data, and stronger common data spaces. A key objective is ensuring EU data sovereignty while enabling easier access to non-personal and industrial data, including through internationally secure data flows. Virkkunen said this will “fundamentally scale up” data availability for European AI developers, enabling faster innovation without compromising privacy.
The European Business Wallets will give all companies a secure, cross-border digital identity valid across all 27 Member States. This tool will allow firms to interact with public authorities and other businesses in a uniform way, reducing paperwork and cutting through the fragmentation that makes cross-border operations costly. Virkkunen said the wallets eliminate “26 times the hassle,” representing one of the most significant Single Market simplifications in years.
A centrepiece of the package is the Digital Omnibus, which consolidates and modernises a complex patchwork of EU digital rules. Four different data regulations will be merged into a single simplified Data Act. The omnibus also provides one reporting point for cybersecurity incidents, ending duplicate or conflicting reporting obligations across different sectors. It introduces adjustments to the AI Act to help businesses comply with high-risk requirements—especially after delays in the standardisation process—ensuring that technical specifications and guidelines are in place before new AI rules take effect.
Dombrovskis described simplification as a key pillar of the EU’s competitiveness agenda, citing the Draghi report and the Competitiveness Compass. He emphasised that 60% of companies identify administrative obstacles as major barriers to growth, and that 55% of SMEs see red tape as their top challenge. He said the Digital Omnibus could deliver around €1 billion in annual savings, contributing to the Commission’s wider goal of reducing administrative burdens by €37.5 billion by the end of its mandate.
Commissioner McGrath detailed the targeted amendments to the GDPR—clarifying key definitions, harmonising obligations, and simplifying compliance without reopening the regulation itself. He stressed that these are “clarifications, not a rewrite,” designed to make the GDPR more uniform and innovation-friendly. Among the amendments are clearer rules on personal data, simplified breach notifications, streamlined information requirements for low-risk processing, and explicit confirmation that personal data may be used for AI development under the “legitimate interest” legal basis—provided all safeguards are respected.
McGrath highlighted that cookie consent rules will finally be simplified: users will be able to accept or refuse cookies with a single click, with their choice valid for six months. This addresses widespread consumer frustration with repetitive cookie banners and shifts enforcement into the GDPR framework for stronger oversight.
The Commissioners defended the balance between innovation and privacy after journalists raised concerns about watering down EU standards. All three stressed that the reforms protect fundamental rights while making the system workable for smaller companies, start-ups, and mid-caps. Virkkunen rejected accusations of bowing to external pressure, insisting that the changes focus on helping European innovators, not global tech giants. On AI Act timing, Virkkunen confirmed that high-risk obligations originally set for August 2026 will be delayed due to missing harmonised standards.
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