EU drops AI Liability Directive: What it means for regulation and innovation
By Anni Rissanen. Read: 1 min 54 s
The European Commission has decided to withdraw a key proposal that would have made it easier to hold companies accountable for AI-related harm. Some say it is a win for innovation, while others warn it creates a legal mess. What happens next for AI regulation in Europe?
The European Commission has decided to withdraw its proposed AI Liability Directive, triggering strong reactions across the political spectrum. This Directive was expected to create a clearer framework for holding companies accountable for AI-related harm. However, its withdrawal raises key questions about how AI liability will be regulated in Europe, namely who will be responsible when AI causes harm, how victims can seek compensation, and whether existing national laws are sufficient to address emerging AI risks.
Mixed reactions in the Parliament
Many in the European Parliament have criticized the decision. Axel Voss (EPP), who led work on the Directive, warned that scrapping it creates ‘legal uncertainty’ because without a common EU-wide framework, AI-related liability will be handled differently in each of the 27 Member States. This means companies and individuals will have to navigate a patchwork of national laws, making it harder to seek compensation for AI-related harm and potentially discouraging smaller businesses from developing AI technologies. Others, including Aura Salla (EPP, Finland), welcomed the decision, arguing that the Directive was flawed and unnecessary. The Socialists & Democrats (S&D) and Greens also voiced concerns, stressing the need for strong AI accountability mechanisms.
Support from governments and the tech industry
The withdrawal, however, was met with approval from EU member states and tech industry groups. Poland and France backed the decision, favoring deregulation over added liability rules. CCIA Europe, which represents major tech firms, praised the move as a win for innovation, arguing that excessive regulation could stifle progress.
The reason behind the withdrawal of the Directive
The Commission cited a lack of political consensus as the main reason for shelving the Directive. Trade Commissioner, Maroš Šefcovic, acknowledged that negotiations had stalled but hinted that a revised approach to AI liability could emerge later in the future. Notably, the European Parliament’s legislative portal remains open for amendments, suggesting that the debate is not entirely over.
What is next for AI regulation?
With this AI Liability Directive off the table, the focus now shifts to how AI liability will be handled across Europe. Will existing regulations, like the AI Act, be enough to ensure accountability? Or will new proposals emerge to bridge the gaps?
For now, the Commission appears to be prioritizing competitiveness and innovation, potentially signaling a shift toward a more flexible regulatory approach. Whether this fosters progress or leaves critical gaps in consumer protection remains to be seen.
