MSC 2025: How much regulation of tech companies is necessary?

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The readjustment of European regulation, particularly in the booming field of artificial intelligence, was the subject of numerous discussions at the Munich Security Conference (MSC). In the face of radical statements from their old transatlantic partner, the USA, European representatives vacillate between prompt opposition and concern about being overrun in the race for innovation.

Europe's self-assessment that the sheer size of its own market allows it to "dictate the speed of economic development" is outdated, said Mike Gallagher, Head of Defense at the US surveillance technology group Palantir on the first day of the MSC. "Given the lack of innovation in artificial intelligence and software development, Europe risks being left behind," said the former Republican MP.

Not only are "the days of genuflecting to Brussels" over, the bloc's regulatory approach threatens to leave it on the losing end of the "cold war" for technology leadership, said Gallagher.

Europe self-critical

Ekaterina Zaharieva, newly appointed EU Commissioner for Start-ups, Research and Innovation in the von der Leyen cabinet, disagreed. She pointed to the disproportionate share of researchers in the EU: with five percent of the world's population, the EU member states account for 25 percent of researchers worldwide. More patents are also granted in Europe than in the USA and there are more start-ups.

However, many of the latter are then drawn to the USA because of better development opportunities. "We are ready for self-criticism," acknowledged the Bulgarian and concluded: "We should find the right path between over-regulation and zero regulation."

Henna Virkkunen, EU Vice-President for Tech Sovereignty, Security and Democracy, had already promised "simplification and harmonization" of digital legislation in response to questions at the associated Munich Cyber Security Conference. As a first step, the laws on digital services and the digital market (DSA, DMA) as well as the EU AI Act are to be examined for possible overlaps. Genuine harmonization in implementation is also under discussion.

AI Act 1.2

Regulation remains indispensable, and striking a good balance between the two is essential for the survival of democratic societies, said Claudia Plattner, Head of the Federal Office for Information Security, in the panel discussion on AI. They could not afford to do without regulation. They would then be overrun by the technology of potentially malicious actors. Nor could they do without their own experiments and innovations. Because they would become dependent on others.

"I would like to see us working on version 1.2 of the AI Act right now," says Plattner's plea. We need to learn to adapt laws more quickly and throw out things that haven't worked," she said.

The professional software developer made specific suggestions in the Munich round table as to which rules she would consider useful in the heated debate about freedom of expression, disinformation and AI: no account for bots, the labeling of AI-generated content and the possibility of signing content to make its authenticity verifiable.

"Technically, cryptographically, that's peanuts," says Plattner. Of course, the tech companies would have to cooperate. Other measures could include the marking of private opinions and company statements as such and the marking of paid content. Such additions to the DSA would cost nothing, says Plattner, but would bring much more transparency for users.

Cultural values in AI regulation?

Kent Walker, President Global Affairs at Google and member of the Security Innovation Board at the Munich Security Conference, disagreed with Plattner's proposals. Proposals such as Plattner's should always be checked for their effects in advance. "Studies have shown that when using AI markers, users automatically believe content that is not marked as true," said Walker.

When asked about possible globally harmonized standards, Walker praised the work of the OECD, GZ and UN, not without noting that in the end each country creates its own regulation for the internet and other technologies, "reflecting the respective cultural values".

Market concentration not conducive to innovation

Times are getting tougher for regulators, warned Amba Kak, one of the directors of the AI Now Institute, in view of the EU-US upheavals. Kak appealed to EU regulators not to give in to pressure from the new US administration. After a decade of discussing the supremacy of a few platforms, the concentration of AI technology in the hands of the same few giants should not simply be accepted. Kak recalled the corresponding proceedings first initiated by the Federal Trade Commission under the Biden administration. Market concentration and key technologies in the hands of a few players is detrimental to an innovative, diversified market, said EU Vice President Virkunnen.

According to Kak, the aim at international level, for example in the G7, must be to counter the new credo issued by the Trump administration that regulation is a dirty word. "The view that any restriction on the unlimited power of US tech companies is tantamount to giving China an advantage in the race for technology leadership is dangerous for our societies."

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