EU’s pivot to ‘competitive’ industrial policy risks rights-based tech
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‘Come gather round people wherever you roam / And admit that the waters around you have grown,’ Bob Dylan sang 60 years ago. At the annual Computers, Privacy and Data Protection (CPDP) conference in Brussels, ARTICLE 19’s Head of Digital, Dr Corinne Cath, invoked this famous refrain to frame Europe’s current AI governance predicament.
This was during a panel discussion titled, ‘A Street Test for the EU’s Digital Rule Book: Ensuring AI governance is grounded in rule of law and fundamental rights’.
‘The waters have indeed grown, but today’s changes reflect deglobalisation, a rising tide of right-wing nationalism, and wars, both kinetic and economic, reshaping the continent’s approach to technology policy,’ she said.
ARTICLE 19’s CPDP panel explored how Europe’s pivot toward ‘competitive’ industrial policy and security-first approaches risks sacrificing human rights protections and meaningful AI governance in favour of maintaining existing power imbalances.
As Cath observed, these geopolitical currents are ‘deprioritising the central position of fundamental rights’ just as Europe confronts a critical inflection point.
After an ambitious legislative push to regulate its digital landscape, EU officials now signal potential rollbacks – part of a broader initiative to enhance ‘economic competitiveness’ through what one panelist called ‘regulatory streamlining’
Brussels’ shifting focus – simultaneously stepping back from regulation while working to fortify Europe’s ‘sovereign’ technology industry through industrial policy – creates a genuine stress test for the EU’s digital rulebook and tEurope’s ability to protect fundamental rights and values.
The panel assembled the ideal group of experts to explore these tensions:
- Associate Professor Dr Seda Gürses of the Technical University of Delft, a leading thinker in the field of the institutional and economic transformation brought by what she calls ‘computational infrastructure’ (CI), the combination of cloud computing and end-devices
- Maria Donde, the International Affairs Director at Coimisiún na Meán, the media and online safety regulator in Ireland, who leads its programme of international engagement, overseeing relationships with European and global institutions, and previously worked at OFCOM
- Kai Zenner, Head of Office and Digital Policy Adviser for MEP Axel Voss (EPP group) in the European Parliament, a Bussels mover and shaker on all things digital with a self-proclaimed ‘soft spot’ for inter-institutional reforms and the ‘Better Regulation Agenda’
- Dr Maria Luisa Stasi, Head of Law and Policy for Digital Markets at ARTICLE 19, a competition lawyer by background with expertise in media, telecoms, and digital sectors, with a focus on utilising economic regulation and competition law and policy to bolster the safeguarding of free expression and media pluralism online
The conversation examined how we can ensure that European, and global, AI governance remains firmly grounded in the rule of law and fundamental rights.
What emerged was a portrait of Europe struggling to make sense of the larger changes – and the uncomfortable realisation that the continent’s approach to regulating AI technologies may be fundamentally flawed.
Yet, the panel ended on a positive note and with a progressive vision for the future, in which fundamental rights remain central.
The academic assessment: is AI a distraction?
Gürses reframed the panel by arguing that Europe has been asking the wrong questions. While policymakers focus on individual technologies, such as ‘big data’, ‘the metaverse’ and ‘generative AI’, they miss the profound structural transformations tech companies are bringing about by reshaping the global economy.
With her deep expertise in both computer science and institutional analysis, Gürses offered a framework for understanding technological change as fundamentally economic and political rather than merely technical
‘These buzzwords distract us from deeper infrastructural changes,’ she explained, describing how tech giants evolved from software companies into controllers of the digital ‘production environment’ itself.
Microsoft, Amazon, Google and Apple now operate what she calls ‘computational infrastructures’: integrated ecosystems of cloud services and end devices that capture the operational core of businesses and governments worldwide.
The shift occurred after the 2008 financial crisis, when these companies used cash reserves to borrow funds from markets which they later used to build systems that generated, what she called, ‘a gravity effect’ – pulling entire economic sectors into their operational orbit.
AI therefore serves not as a disruptive force, but as a tool to deepen these dependencies by increasing the gravitational pull that draws businesses into closed production environments.
Gürses’ analysis provided crucial context for understanding why traditional regulatory approaches may prove insufficient, as they address symptoms rather than the underlying transformation of how economic production itself is re-organised through these infrastructures.
The implications are stark.
When Donald Trump sanctioned the International Criminal Court (ICC) over an arrest warrant for Israeli Prime Minister Netanyahu, the court was paralysed because they were reliant on Microsoft for their functioning.
When Norway’s energy providers contracts required them to prioritise TikTok data centers over local manufacturers, or when public institutions discovered they couldn’t exit cloud services without massive capital injections after dismantling their own IT infrastructure, the reality became clear: Europe is ceding economic self-determination one server at a time.
The regulator’s reality: can principle-based regulation keep up?
Donde brought the practitioner’s perspective to the discussion.
‘We are not experts in AI as such,’ she acknowledged, reflecting the challenge facing regulators worldwide as they grapple with rapidly evolving technologies.
Her experience spans both the Irish system and her previous work at OFCOM, providing insights into different regulatory models and their effectiveness in addressing complex digital challenges.
Donde outlined how Europe’s new frameworks, like the Digital Services Act (DSA), operate on principles rather than prescriptive rules, requiring years of iterative learning to identify effective interventions.
Her agency works within this structure to assess AI risks and systemic impacts across platforms, sharing oversight responsibilities with the European Commission and fellow regulators across Europe.
Her approach emphasised building partnerships and networks among regulators, recognising that effective oversight requires collaboration across sectors and jurisdictions
Donde stressed the importance of bringing fundamental rights expertise into discussions often dominated by technical and economic considerations – a perspective crucial for maintaining Europe’s values-based approach to digital governance.
Zenner provided insight into the institutional dynamics shaping Europe’s approach to AI governance.
Despite initial optimism about reports calling for more coherent policy, he observed how the European Commission shifted its narrative from regulation to competitiveness without addressing what he sees as key underlying structural problems.
Kai’s work with MEP Voss is focused on finding cross-party solutions to these systemic challenges.
‘Digital policy making with fundamental rights focus was replaced by a strong focus now on competitiveness,’ Zenner noted, describing how this poorly defined concept has become central to regulatory discussions.
He pointed to the proposed withdrawal of the AI Liability Directive as emblematic of this shift, arguing that Europe risks abandoning important protections in favour of perceived innovation advantages.
Although Voss is generally in favour of reduced regulations, Zenner stressed that such a turn should happen with a more cohesive vision of the future for a digital Europe, and that vision required further development.
Zenner outlined some concrete institutional reforms and steps that could be taken now:
- an independent regulatory scrutiny board
- a digital enforcement agency, and
- even a ‘sovereignty compact’ that would allow willing member states to advance together while others maintain national approaches
His proposal reflects his years of experience with EU institutional processes and the recognition that current governance structures may be inadequate for the scale of technological transformation Europe faces.
The civil society call: how to be mighty when small in EU AI governance?
Stasi from ARTICLE 19 examined how civil society organisations navigate AI governance discussions increasingly dominated by business and security considerations.
She described how fundamental rights advocates find themselves systematically excluded when conversations centre on trade policy, defence strategy or industrial competitiveness.
‘We are a handful of people,’ Stasi observed, explaining how a small number of civil society representatives attempt to engage across dozens of international, regional and national forums while facing well-resourced corporate advocacy.
She noted how even the comparatively toothless ‘ethical AI’ discourse has given way to calls for regulatory moratoriums and deregulation, creating what she termed ‘epistemic capture’ – where policymakers primarily receive information filtered through corporate perspectives
Stasi brought particular expertise from competition law, having recently sued Microsoft over cloud licensing practices she argues are abusive. In her view, antitrust tools and pro-competitive regulations must be deployed to address AI and cloud market concentration.
While acknowledging that competition law and policy alone cannot guarantee that fundamental rights are adequately protected, she also insisted that diluting and decentralising corporate power is a necessary step towards accountability.
Her approach seeks to connect economic regulation with fundamental rights protection, arguing that concentrated market power undermines both democratic governance and media pluralism online.
A continent at a watershed moment
These four perspectives illuminate different facets of the same fundamental challenge: Europe’s current AI governance framework fails to capture the scale of transformation underway.
Gürses’s analysis of computational infrastructures provides an economic foundation for understanding why traditional tech regulation feels inadequate: it addresses individual applications while missing the structural re-organisation of the global economy.
Donde’s regulatory experience validates this concern from the ground level. Her emphasis on principle-based frameworks and collaborative networks reflects an intuitive recognition that prescriptive rules alone cannot address larger systemic change.
Her call for bringing fundamental rights expertise into technical discussions points toward the integration needed to address the broader transformation described by Gürses.
Zenner’s institutional critique builds on both perspectives, showing how EU governance structures perpetuate the very fragmentation that makes comprehensive responses impossible.
His proposed reforms – independent oversight, digital enforcement agencies, sovereignty compacts – represent attempts to create institutions capable of addressing some of these concerns, even though he himself acknowledges how the current political fragmentation across the EU might complicate these ambitions.
Stasi’s analysis of civil society exclusion reveals the democratic deficit at the heart of current AI governance approaches. Her work connecting competition law to fundamental rights protection demonstrates how economic concentration and rights erosion are interconnected – precisely the kind of holistic thinking that current governance structures struggle, or actively refuse, to accommodate.
The collective insight from the panel suggests that bringing fundamental rights back to the core of AI governance requires more than better policies or reformed institutions.
It demands inverting the relationship between technology and society: developing technologies that serve a vision of structural justice and fundamental rights rather than forcing society to accommodate technological imperatives designed primarily to concentrate economic power
As Gürses argued, ‘we need to put questions of structural justice, fundamental rights, and the environment, not just within Europe but in the world, as drivers of a vision for technology, not the other way around’.
The times are indeed changing. We need to ensure that Europe changes with them on the terms set not by corporate interest by its commitment to fundamental rights.
