The World In Focus Part One: The European Union

The World In Focus is an Internatnotes mini-series featuring concise briefings on the most current policy updates presented on a regional scale. 

1. The EU Artificial Intelligence Act (2024)

   
   

In a past article, our team had reviewed the impacts of Singaporean and East Asian developments for AI, but it is crucial to recognize the developments in regulating similar algorithmic technology 6,000 miles away from the South China Sea. Before the introduction of the EU AI Act on May 21st, many discussions on the management of rising artificial intelligence technologies sparked collaboration across the union for approximately three years before the act’s final adoption. 

These discussions called upon the establishment of a policy that built upon the General Data Protection Regulation (GDPR), which was adopted in 2018 with the intent to protect the personal data and information of EU residents through principles of accuracy, limited storage, integrity, and confidentiality. 

However, one of the most significant implementations of the policy—applied to the EU’s twenty-seven member states and those who process the data of EU citizens—was the evolution of data rights. Operating under eight guidelines, including the right to erasure and the right to restrict processing, individuals received greater autonomy in how their online data is stored and processed.

Nevertheless, with the rise of artificial intelligence, there remained many ambiguities. At last, there was a time for update and reform, but before discussing the updates of the EU Artificial Intelligence Act, it is notable to review that the GDPR included one data right that paved the way towards AI regulation: rights in relation to automated decision making and profiling. 

As listed above, Article 22 of the GDPR does make advancements in ensuring that serious outcomes for data subjects involve human participation.  Therefore, the policy makes advancements in the protection of subjects under artificial intelligence conditions, but under the EU AI Act, eight practices—listed in Article 5—are entirely prohibited to ensure the protection of data subjects.

For instance, untargeted scraping of the internet for the purposes of facial recognition databases or unethical acts of social scoring both fall under this category. Compared to the GDPR’s focus on awareness and initial control, especially within the right to be informed policy—requiring organizations to inform users of the purpose of consumer data collection—the recent protocol expands on the notion of protection through outright elimination of certain practices. 

Additionally, in a similar nature to the GDPR’s focus on civilian understanding and awareness, the union had established Article 50(2), asserting that AI systems generating forms of audio, image, video, or text content must be presented in a “machine-readable” format or identify themselves as artificial intelligence to users. In an age where technological capabilities to deceive and manipulate are reaching great lengths, the role of the article serves to limit the erosion of digital trust, especially with forms of political disinformation in news domains or false human connections, such as with customer service in commerce domains.

2. EU Inc. (2026)

A recent addition to the European Union’s policy-sphere, the initiative was first announced by Commission President Ursula von der Leyen at the World Economic Forum in Davos, Switzerland. Before its introduction, many entrepreneurs across the member states faced difficulty in scaling their business operations as a result of having to manage a variety of legal systems, specifically sixty various corporate systems across the twenty-seven member states. Ultimately, this climate has resulted in the relocation of countless well-developed European businesses, such as over thirty percent of European startups valued at above one billion USD moving abroad. Many of these businesses end up residing in the United States, where corporations can scale production and practices across all fifty states under Delaware C-Corporation procedures.

Advocacy for the initiative began in 2024, with influential startup figures such as German investor Andreas Klinger, who had asserted the opportunity to establish a centralized procedure platform. Ultimately, the proposal gained traction, receiving the support of national associations like France Digitale, the German Startup Association, Startup Hungary, and Austrian Startups.

One of the notable reforms includes its alterations to the registration period. Through EU Inc., individuals can establish a company within 48 hours for 100 euros. Compared to more costly ventures—such as Germany’s GmbH that requires 25,000 euros in share capital—entry barriers are greatly reduced.

An additional element of the initiative that targets streamlined operations includes its “Once-only” Principle, in which, to avoid repetitive forms of registration among tax authorities and the commercial registry, the EU provides a shared Business Register Interconnection System (BRIS) platform that enables automatic transmissions of company data. 

As of June 2026, EU Inc has not been formally adopted by the European Parliament and Council of the EU, but on March 18th, 2026, the movement had received the support of the European Commission, signaling greater political strength, and agreements upon its implementations are targeted to be agreed upon by the end of the year. 

Bibliography

"AI Act Explorer - Article 5: Prohibited AI Practices." European Commission, ai-act-service-desk.ec.europa.eu/en/ai-act/article-5.

Batista Cabanas, Leticia, and Elisabeth Heinz. "What Is EU-INC and Its Plan to Make European Businesses Borderless?" Euronews, 2 Mar. 2026, www.euronews.com/my-europe/2026/02/03/what-is-eu-inc-and-its-plan-to-make-european-businesses-borderless.

"EU Inc. and the '28th Regime': Breakthrough or Another Layer?" International Network for Small and Medium Enterprises, www.insme.org/eu-inc-and-the-28th-regime-breakthrough-or-another-layer/#:~:text=EU%20Inc.%2C%20supposedly%20the%20starting,60%20distinct%20company%20legal%20forms.

"EU Inc.: A New Harmonised Corporate Legal Regime." European Commission, commission.europa.eu/topics/business-and-industry/doing-business-eu/company-law-and-corporate-governance/eu-inc-new-harmonised-corporate-legal-regime_en#:~:text=It%20also%20introduces%20fully%20digital,safeguards%20against%20fraud%20and%20abuse.

"EU Inc. – making business easier in the European Union." European Commission, 18 Mar. 2026, commission.europa.eu/news-and-media/news/eu-inc-making-business-easier-european-union-2026-03-18_en.

Sartor, Giovanni. The Impact of the General Data Protection Regulation (GDPR) on Artificial Intelligence: Study.