EU competition and digital chief Margrethe Vestager defends the AI Act

  • Margrethe Vestager, the EU’s competition and digital chief, defended the proposed AI Act
  • While the AI Act may come into force this year, there are challenges yet to overcome
  • Tech companies and politicians like Macron warn about the act's impact on competition
Eu AI Act

In a recent interview with the Financial Times, Margrethe Vestager, the EU’s competition and digital chief, robustly defended the proposed AI Act. 

This legislation is facing criticism, notably from French President Emmanuel Macron, but Vestager argued that it would provide much-needed “legal certainty” for technology startups working with AI.

Vestager emphasized, “The AI Act creates predictability and legal certainty in the market when things are put to use.”

Not everyone agrees with that, with some arguing the act will effectively curb growth in the EU AI industry and burden developers with laborious compliance tasks. 

Vestager added, “It is important that you do not have any regulatory over-reach, that innovation and research is promoted again.” This reflects the argument that the AI Act will bolster, rather than hinder, innovation and research within the EU.

The Act has sparked controversy, particularly after Macron warned of over-regulation risks, stating, “We can decide to regulate much faster and much stronger than our major competitors. But we will regulate things that we will no longer produce or invent. This is never a good idea.” 

Despite being agreed upon this month, the AI Act still awaits ratification by EU member states. Some countries, like France, Germany, and Italy, are reportedly considering amendments or even blocking the law.

The legislation introduces a dual approach towards AI regulation. It sets out transparency requirements for general-purpose AI models, like those from OpenAI, and imposes stricter rules for models used in sensitive sectors, such as healthcare.

It also plans to strictly limit facial recognition technology, except for specific law enforcement purposes.

The Act’s shifting terms and definitions

Responses to the AI Act have been varied. Both tech companies and officials worry about the Act being overly burdensome, with over 150 executives from major companies openly expressing their concerns about its impact on business.

Jeannette zu Fürstenberg, a founding partner of La Famiglia VC, warned of “catastrophic implications for European competitiveness.”

Meanwhile, Europe’s tech ecosystem has shown signs of growth, particularly in venture capital investment, though its global influence remains limited compared to the US and Asia. Regulation risks stubbing that growth out. 

The true impact of the AI Act – whether it shields EU citizens from potential AI risks or hinders technological advancement – will only be revealed in time.

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