Nicoletta Rangone is a professor of Administrative Law at LUMSA University and Director of the Jean Monnet Centre of Excellence on Sustainable AI for Regulation on SUSTAIN-AI-REG.
The EU’s regulation of AI uniquely balances innovation and the protection of fundamental rights.
The European Union has positioned itself as promoter of a “rights?driven” model to artificial intelligence (AI) governance. The EU exercised its regulatory powers to “promote the uptake of human-centric and trustworthy artificial intelligence (AI), while ensuring a high level of protection of health, safety, fundamental rights … and supporting innovation.” The European approach aims to guarantee a high level of protection for fundamental rights and to rebalance power asymmetries by constraining large technology companies while empowering users and smaller firms. Yet this model faces strong criticism—particularly in contrast with the “market-driven” regulatory environment of the United States and the state-driven coordinated model of China, both of which have facilitated the rise of global tech champions.
Experts argue that European regulation has increasingly functioned as a substitute for investment. Faced with limited fiscal capacity to support large-scale innovation, the European Commission has relied heavily on regulation as a policy lever, compensating for the absence of a coherent industrial strategy in AI.
By focusing primarily on output regulation rather than cultivating the necessary inputs for competitiveness—such as access to capital, computing infrastructure, high-quality data, and talent—the EU risks losing what has been described as its “cognitive sovereignty,” as non-European values and technological standards become embedded in systems deployed across Europe and might shape imagination, tastes, ideas and, ultimately, democracy. This regulatory emphasis, combined with comparatively weaker innovation ecosystems, has contributed to persistent concerns about the EU’s capacity to compete in the global AI race.
Another recurring critique targets innovation stagnation, despite authoritative opposing views. Stringent regulatory obligations may deter experimentation and delay deployment, preventing AI applications from improving everyday life for European citizens. The cumulative effect is the danger of relegating the EU to the role of a consumer rather than a producer of advanced AI technologies.
Closely linked to this concern is the problem of regulatory lag. Digital markets evolve at a pace that is difficult to reconcile with lengthy legislative processes, raising the possibility that by the time regulatory frameworks enter into force, they may be already outdated. This dynamic creates pressure for continuous amendments, increasing uncertainty for both regulators and regulated actors. Within this context, the EU has struggled to cultivate and retain AI talent, which often migrates to jurisdictions where funding opportunities, research ecosystems, and career prospects appear more robust.
At the heart of the debate lies a fundamental tension between innovation and the protection of fundamental rights. For many Europeans, safeguarding human dignity, privacy, and non-discrimination is not a negotiable trade-off for technological progress. This tension is especially clear in education, where future generations are shaped.
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