The decision to withdraw the proposed Directive reflects the EU’s shift towards deregulation and simplification of EU rules, aimed to foster innovation and boost the EU’s competitiveness. Indeed, the Commission’s 2025 work programme dropped several other legislative proposals, including the long awaited ePrivacy Regulation which was meant to replace the current ePrivacy Directive.
This shift in EU agenda was emphasised by EU Commission President Ursula von der Leyen at the AI Action Summit held in Paris on the 10-11 February, who remarked a push to “cut red tape”. Notably, US Vice President JD Vance strongly criticised the EU’s strict tech regulations in his speech at the AI Action Summit, specifically referring to the Digital Services Act and the General Data Protection Regulation.
Originally proposed in 2022, the AI Liability Directive was meant to cover aspects of non-contractual civil liability for damage caused with the involvement of AI systems. The proposed Directive was designed to complement the EU AI Act and establish a harmonised approach towards AI liability within the EU, preventing legal fragmentation in this area.
Over the past months, the proposed Directive was indeed subject to various pushback. Critics argued that AI liability may be well addressed by national legal frameworks together with the revised Product Liability Directive. Furthermore, many tech companies lobbied against the Directive, mainly due to their potentially increased exposure to liability.
The balance between innovation and regulation has yet again been placed at the forefront of the EU Commission’s agenda, with this decision shedding light on the EU’s struggle to remain an innovative and competitive market. This demonstrates the current push towards AI innovation and it will be interesting to follow the eventual implications of this decision on an EU regulatory level, as well as on an international trade level.
