• The EU is easing telecom pressure on Big Tech while reviewing Google’s Wiz deal.
• Regulators tightening oversight of AI platforms, including X, over harmful content.

Europe’s push to tighten control over digital markets is entering a complicated phase. This week, EU officials signalled restraint toward Big Tech in some areas, while stepping up pressure in others, as debates over competition, telecom investment, and AI harms collided in Brussels and national capitals.

At the centre of that balancing act is a new telecom framework that will stop short of imposing fresh obligations on the largest US technology firms, even as European telecom operators push for tougher rules. At the same time, EU regulators are weighing a major cybersecurity acquisition by Google, while separately scrutinising Elon Musk’s X over AI-generated sexual imagery and deepfake risks.

Together, the moves show how uneven Europe’s digital rulebook remains, particularly as artificial intelligence accelerates the stakes.

Telecom overhaul stops short of binding rules for Big Tech

Later this month, EU tech chief Henna Virkkunen is set to unveil the Digital Networks Act, a proposal aimed at reshaping how Europe builds and manages its telecom infrastructure. The plan is meant to encourage investment in fibre and mobile networks and reduce regulatory friction in the bloc’s 27 member states.

Despite pressure from telecom companies, the draft framework will not impose binding obligations on large technology platforms like Google, Meta, Netflix, Microsoft, or Amazon. Instead, those firms will be invited into a voluntary cooperation model, overseen by the EU telecom regulators’ group, BEREC.

Under this approach, participation would focus on discussions and shared practices rather than enforcement. There would be no new legal duties placed on the companies, a choice that reflects concerns in Brussels about reopening transatlantic tensions over alleged discrimination against US firms.

That caution comes after years of criticism from Washington over Europe’s expanding digital rulebook, including competition and content laws that US officials argue unfairly target American companies. EU leaders have consistently rejected those claims, saying the rules apply regardless of nationality.

Spectrum control and fibre deadlines expose national tensions

The telecom package also touches on politically sensitive ground. It proposes common guidance on how long spectrum licences should last, how spectrum can be sold, and how national regulators should price auctions that often bring in billions of euros for governments. While the stated goal is consistency, some national regulators may see this as Brussels encroaching on domestic authority.

The proposal would also allow governments to delay a 2030 deadline to shut down copper networks, if they can show they are not ready to complete the shift to fibre. That flexibility reflects uneven progress in Europe, particularly in rural areas.

Even if the Commission presents the plan on January 20, negotiations with EU governments and the European Parliament are expected to stretch over months, if not longer.

Google’s Wiz deal faces EU competition review

While telecom rules lean toward cooperation, competition enforcement remains active. EU antitrust regulators are now reviewing Google’s planned $32 billion acquisition of Wiz, a cybersecurity firm, with a decision due by February 10.

The deal is Google’s largest to date and comes as cloud providers invest heavily in security tools, partly driven by customer concerns over breaches and state-backed cyber threats. The European Commission can approve the transaction outright, approve it with conditions, or open a deeper investigation if it believes the deal could harm competition.

Large technology mergers have faced tougher scrutiny in recent years, as regulators question whether acquisitions strengthen already powerful firms or limit choices for customers. The Commission has already cleared the deal in the United States, but European regulators operate under a separate process and timetable.

The outcome will be closely watched by both the tech sector and policymakers, especially as cybersecurity becomes more tightly linked to cloud infrastructure and national security debates.

AI-generated sexual imagery triggers tougher scrutiny of X

If competition policy remains procedural, content and AI risks have triggered sharper responses. This week, the European Commission ordered X to preserve internal documents related to its AI chatbot Grok for an extended period, amid growing concern over the platform’s handling of sexualised imagery.

The order extends an earlier document retention request tied to the spread of illegal content and algorithms, pushing the deadline through the end of 2026. According to Commission spokesperson Thomas Regnier, the move is meant to ensure regulators can access records if compliance questions arise.

“This is saying to a platform, keep your internal documents, don’t get rid of them, because we have doubts about your compliance… and we need to be able to have access to them if we request it explicitly,” he said.

The decision follows backlash over Grok-generated images, including sexualised content targeting public figures. Sweden’s deputy prime minister was among those affected, prompting sharp criticism from the country’s leadership. Swedish Prime Minister Ulf Kristersson described the images as “a kind of sexualised violence” and said: “It’s distasteful, unacceptable, offensive.”

British Prime Minister Keir Starmer also weighed in after a report by the Internet Watch Foundation found that Grok had been used to generate sexualised images of children. “It’s disgusting. And it’s not to be tolerated,” he said.

The Commission said the document order does not amount to a new formal investigation under the Digital Services Act, but it signals ongoing concern. X said earlier this month that it removes illegal content and suspends accounts involved in such activity, including misuse of Grok.

National regulators step in as EU pressure builds

Pressure is also building at the national level. Italy’s data protection authority issued a warning this week to AI providers and users, including those operating tools like Grok, over the risks of creating deepfake images from real people without consent.

The watchdog said services that allow users to manipulate real images or voices, including digitally undressing individuals, could amount to criminal offences and serious privacy violations under EU law. It added that it is working with Ireland’s Data Protection Commission, which oversees X due to its EU base, and may take further action.

The message from regulators is increasingly clear: while Europe may tread carefully when it comes to market structure and investment, it is losing patience with platforms that fail to control how AI tools are used.

As Brussels juggles telecom reform, merger control, and AI enforcement, the broader question remains unresolved. Can Europe encourage growth and innovation without repeating the mistakes that allowed online harms to spread unchecked? This week’s developments suggest the answer will come through uneven, and sometimes conflicting, choices rather than a single, clean strategy.

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