EU draft regulation aims to create new legal framework for startups

A draft initiative from the European Commission seeks to introduce a new legal structure designed to simplify how companies operate across the EU.

The proposal, often referred to as the ‘EU Inc’ initiative, explores the creation of a so-called ’28th regime’ that would exist alongside national corporate frameworks used by member states.

A concept that aims to provide startups and technology firms with a single legal structure that applies across the EU.

Instead of navigating different national rules in each country, companies could operate under a unified regulatory model intended to reduce administrative barriers and encourage cross-border innovation.

According to the draft, the initiative may rely on an EU regulation rather than separate national legislation. Such an approach could enable faster implementation, as the EU regulations apply directly across all member states without requiring domestic transposition.

However, the legal basis of the proposal could raise institutional concerns. Using a regulation as the primary mechanism may constitute an unconventional shortcut in the EU lawmaking, potentially sparking debate among policymakers over the approach’s scope and legitimacy.

The initiative reflects broader efforts within the Union to simplify regulatory frameworks and strengthen the competitiveness of European startups. If adopted, the ‘EU Inc’ model could reshape how young companies expand across the single market.

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EU launches AI platform to detect food fraud and contamination

Food safety monitoring across the EU is receiving a technological upgrade with the launch of TraceMap, a new AI platform designed to detect food fraud, contamination and disease outbreaks more quickly.

The European Commission introduced the tool as part of efforts to strengthen consumer protection and improve oversight of the agri-food supply chain.

TraceMap helps authorities analyse large volumes of data related to food production, distribution and trade. By identifying connections between operators, shipments and supply chains, the system allows investigators to spot suspicious activity and potential safety risks earlier.

National authorities in the EU member states can already access the platform, enabling them to conduct more targeted inspections and investigations without requiring additional resources.

The platform draws on data from existing EU systems such as the Rapid Alert System for Food and Feed (RASFF) and the Trade Control and Expert System (TRACES). Using AI to structure and interpret information, TraceMap can reveal patterns in production and trade flows that may indicate contamination, fraud, or other irregularities in the food supply chain.

Early testing of the platform has already demonstrated its practical value. A pilot version of TraceMap helped authorities identify and recall infant milk formula produced with contaminated ARA oil originating from China.

European officials say the system will strengthen the EU’s ability to respond rapidly to food safety risks while improving monitoring of both domestic production and imported products.

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EU considers stronger child protection in Digital Fairness Act

Capitals across the EU are being asked to discuss how stronger child protection measures should be incorporated into the upcoming Digital Fairness Act (DFA).

The initiative comes as policymakers attempt to address growing concerns about how online platforms expose minors to harmful content, manipulative design practices, and unsafe digital environments.

According to a document circulated during Cyprus’s Council presidency of the European Union, member states are expected to debate which concrete safeguards should be introduced as part of the broader consumer protection framework.

Officials are exploring whether new rules should require platforms to adopt stricter safeguards when designing digital services used by children.

The discussions are part of the European Union’s broader effort to strengthen digital governance and consumer protection across online platforms. Policymakers are increasingly focusing on how platform design, recommendation algorithms, and monetisation models may affect younger users.

The proposals could complement existing EU regulations targeting large digital platforms, while expanding protections specifically focused on minors.

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The EU faces growing AI copyright disputes

Courts across Europe are examining how copyright law applies to AI systems trained on large datasets. Judges in Europe are reviewing whether existing rules allow AI developers to use copyrighted books, music and journalism without permission.

One closely watched dispute in Luxembourg involves a publisher challenging Google over summaries produced by its Gemini chatbot. The case before the EU court in Luxembourg could test how press publishers’ rights apply to AI-generated outputs.

Legal experts warn the ruling in Luxembourg may not resolve wider questions about AI training data. Many disputes in Europe focus on the EU copyright directive and its text and data mining exception.

Additional lawsuits across Europe involving music rights group GEMA and OpenAI are expected to continue for years. Policymakers in Europe are also considering updates to copyright rules as AI technology expands.

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EU and Canada begin negotiations on a digital trade agreement

The European Commission and Canada have launched negotiations on a new Digital Trade Agreement to strengthen the rules governing cross-border digital commerce.

The initiative was announced in Toronto by the EU Trade Commissioner Maroš Šefčovič and Canadian International Trade Minister Maninder Sidhu.

An agreement that will expand the digital dimension of the existing Comprehensive Economic and Trade Agreement, which has already increased trade in goods and services between the two partners.

Officials say the new negotiations aim to create clearer rules for businesses and consumers engaging in cross-border digital transactions.

Proposals under discussion include promoting paperless trade systems, recognising electronic signatures and digital contracts, and prohibiting customs duties on electronic transmissions.

The agreement between the EU and Canada will also seek to prevent protectionist practices such as unjustified data localisation requirements or forced transfers of software source code.

European officials argue that the negotiations reflect a broader effort to develop international standards for digital trade governance while preserving governments’ ability to regulate emerging challenges in the digital economy.

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EU Commission’s new guidance to push Cybersecurity Resilience Act

The EU Commission has opened a public consultation on draft guidance to help companies apply the EU’s Cyber Resilience Act (CRA), a regulation that sets baseline cybersecurity requirements for hardware and software ‘products with digital elements’ to reduce vulnerabilities and improve security throughout a product’s life cycle. The guidance is framed as practical help, especially for microenterprises and SMEs, and the consultation runs until 31 March 2026.

The CRA is designed to make ‘secure by design’ the default for connected products people use every day, from consumer devices to business software, while giving users clearer information about a product’s security properties. In timeline terms, the Act entered into force on 10 December 2024. The incident reporting duties start on 11 September 2026, and the main obligations apply from 11 December 2027, giving industry a runway but also a clear countdown.

What the Commission is trying to nail down now are the parts companies have found hardest to interpret: how the rules apply to remote data processing solutions (cloud-linked features), how they treat free and open-source software, what ‘support periods’ mean in practice (i.e. how long security upkeep is expected), and how the CRA fits alongside other EU laws. In other words, this is less about announcing new rules and more about reducing legal grey zones before enforcement ramps up.

The guidance push also lands amid a broader policy drive, as on 20 January 2026, the Commission proposed a new EU cybersecurity package, built around a revised Cybersecurity Act and targeted NIS2 amendments. The package aims to harden ICT supply chains, including a framework to jointly identify and mitigate risks across 18 critical sectors, and would enable mandatory ‘de-risking’ of EU mobile telecom networks away from high‑risk third‑country suppliers. It also proposes a revamped EU cybersecurity certification system with simpler procedures, giving a default 12‑month timeline to develop certification schemes, while cutting red tape for tens of thousands of firms and strengthening ENISA’s role, including early warnings, ransomware support, and a major budget boost.

Taken together, the EU is moving from strategy documents to operational details, product security on one side (CRA) and ecosystem-level resilience on the other (supply chains, certification, incident reporting and supervision). For companies, that can be both reassuring and demanding: clearer guidance should reduce uncertainty, but the compliance reality may still be layered, especially for businesses spanning devices, software, cloud features, and cross-border operations. The Commission’s stakeholder feedback window is essentially a test of whether these rules can be made workable without diluting their bite.

Why does it matter?

Beyond technical risk, this is increasingly about sovereignty: who sets the rules for digital products, who can be trusted in supply chains, and how much dependency is acceptable in critical infrastructure. Digital governance expert Jovan Kurbalija argues that full ‘stack’ digital sovereignty, that is to say control over infrastructure, services, data, and AI knowledge, is concentrated in very few states, while most countries must balance openness with autonomy. The EU’s current wave of cybersecurity governance fits that pattern: it’s an attempt to turn security standards, certification, and supply-chain choices into a practical form of strategic control, not just to prevent hacks, but to protect democratic institutions, economic competitiveness, and trust in the digital tools people rely on.

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EU competition scrutiny pushes Meta to reopen WhatsApp AI access

Meta has announced that third-party AI chatbots will again be allowed to operate through WhatsApp in Europe, reversing restrictions introduced earlier this year.

The decision follows pressure from the European Commission, which had warned it could impose interim competition measures.

Earlier in 2026, Meta limited access to rival chatbot services on the messaging platform, prompting regulators to examine whether the move unfairly restricted competition in the rapidly expanding AI market.

WhatsApp remains one of the most widely used messaging applications across European countries, making platform access critical for emerging AI services.

Under the new arrangement, companies will be able to distribute general-purpose AI chatbots via the WhatsApp Business API for 12 months.

The change is intended to give European regulators time to complete their investigation while allowing competing AI services to operate within the platform ecosystem.

Meta has also indicated that businesses offering chatbots through WhatsApp will be required to pay fees to access the system.

The European Commission is now assessing whether these adjustments sufficiently address competition concerns surrounding the integration of AI services inside major digital platforms.

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Calls grow to strengthen New Zealand privacy law

Pressure is growing in New Zealand to strengthen the Privacy Act following several high-profile data breaches. Debate in New Zealand intensified after a cyberattack exposed medical records from the Manage My Health patient portal.

The breach in New Zealand affected about 120,000 patients and involved threats to release documents on the dark web. Another incident forced the MediMap medication platform offline after unauthorised changes were detected in patient records.

Privacy specialists argue that current enforcement powers are too weak to deter serious failures. The Privacy Act allows only limited financial penalties, with fines generally capped at NZD10,000.

Officials are now considering reforms, including stronger penalties for privacy violations. Policymakers also warn that failure to strengthen the law could threaten the country’s EU data adequacy status.

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EU launches panel on child safety online and social media age rules

The European Commission has convened a new expert panel tasked with examining how children can be better protected across digital platforms, including social media, gaming environments and AI tools.

The initiative reflects growing concern across Europe regarding the psychological and safety risks associated with young users’ online behaviour.

Announced during the 2025 State of the Union Address by Commission President Ursula von der Leyen, the panel will evaluate evidence on both the opportunities and harms linked to children’s digital engagement.

Specialists from health, computer science, child rights and digital literacy will work alongside youth representatives to assess current research and policy responses.

Discussions during the first meeting centred on platform responsibility, including age-appropriate safety-by-design features, algorithmic amplification and addictive product design.

An initiative that also addresses digital literacy for children, parents and educators, while considering how regulatory measures can reduce risks without undermining the benefits of online participation.

The panel’s work complements the enforcement of the Digital Services Act and related European policies designed to strengthen protections for minors online.

Among the tools under development is an EU age-verification application currently tested in several member states, intended to support privacy-preserving checks compatible with the future EU digital identity framework.

The panel is expected to deliver policy recommendations to the Commission by summer 2026.

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EU watchdog urges limits on US data access

The European Union’s data protection watchdog has urged stronger safeguards as negotiations continue with the US over access to biometric databases. European Data Protection Supervisor Wojciech Wiewiórowski said limits must ensure Europeans’ data is used only for agreed purposes.

Talks between the EU and the US involve potential arrangements that would allow US authorities to query national biometric systems. Databases across the EU contain sensitive information, including fingerprints and facial recognition data.

Past transatlantic data-sharing agreements between the two have faced legal challenges due to insufficient safeguards. European regulators are closely monitoring the Data Privacy Framework amid ongoing concerns about oversight.

Officials also warned that emerging AI technologies could create new surveillance risks linked to US data access. European authorities said they must negotiate as a unified bloc when dealing with the US.

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