Are EU Rules Meant To Protect Citizens Actually Chasing Innovation Away?

Apple’s September launch brought AirPods fitted with live translation, a feature powered through Apple Intelligence on its iPhones. The tool allows conversations in real time across different languages, but it is not available for anyone in the European Union.

The company’s support page said, “Live Translation with AirPods is not available if you are in the EU and your Apple Account Country or Region is also in the EU.”

This restriction comes after a European Commission decision under the Digital Markets Act which forces Apple to make certain services usable with rival devices. Apple executives had already warned that such rules could keep services away from the region.

Languages currently active on the system are English, French, German, Portuguese and Spanish, with Italian, Japanese, Korean and Chinese planned before the year ends.

For now, these features are out of reach for people across Europe…

 

What Is Behind The Restriction?

 

Apple has had repeated clashes with the Commission and has faced two fines in the past year. These had to do with antitrust and data rules. Against that backdrop, the company seems unwilling to risk another penalty and has acted pre-emptively.

The Commission disputes Apple’s stance. A spokesperson said the company made the decision alone and that the Digital Markets Act does not block the launch of new products in the EU. They added that the law is designed to support innovation and choice for consumers.

Other EU rules also have a heavy impact right now… The AI Act and the General Data Protection Regulation set strict limits around consent, data sharing and consumer rights. For a tool like live translation, these conditions complicate how Apple rolls it out.

 

How Are People Reacting?

 

The restriction has spread quickly on social media. Christian Calgie wrote on X that Europe is “the place in the world possibly most useful to have that feature.” Daniel Castro called it “a perfect example of the unintended consequences of the DMA.”

Many users are frustrated that a much-publicised tool is absent in their region.

Investors and businesses worried about how these rules might actually be chasing innovation away. Here’s what experts think on this…

 

Our Experts:

 

• Scott Bickley, Advisory Fellow, Info-Tech Research Group.
• Jason Wingate, CEO, Emerald Ocean Ltd
• Rich Pleeth, CEO and Co-Founder, Finmile
• Elie Berreby, Organic Growth Advisor, SEM King
• Leo Labeis, CEO & Founder, REGnosys
• Kartik Venkatesh, Global Head of Innovation, GBG

 

Scott Bickley, Advisory Fellow, Info-Tech Research Group.

 

 

“Over the past few years, the EU has released a litany of regulations targeted at the heart of the technology industry. From the Data Act and Data Governance Act in 2023, the Digital Markets Act (DMA) and the Digital Services Act (DSA) in 2024, the AI Act taking effect in 2026, and the Cyber Resilience Act (CRA) coming into effect by the end of 2027, organisations, small and large alike, are now facing the reality of embracing a tsunami of administrative overhead to ensure compliance with this myriad of regulatory oversight.

“These acts are aimed at levelling the playing field between the tech behemoths like MSFT or GOOG, for example, and the smaller market entrants on one hand, while providing that all provisioned services will treat data in the same manner, making certain data accessible, usable, and openly transparent (i.e. IOT) to all market participants. Whereas the AI Act and the CRA impose a regulatory framework across which all market participants, large or small, must comply. These acts seek to ensure the safe use of AI via a risk management framework, while the CRA seeks to build a security baseline across applicable products sold in the EU.

“The potpourri of these acts is a mixed bag, with some ostensibly flattening the disparate competition imbalance between the technology mega-vendors and the rest of the world. While other regs are seeking to instill a baseline of trust, security, and safety into the marketplace.

“A noble goal, but one that inherently benefits the deep pockets of the technology vendor elites in the best of circumstances, while potentially discouraging nascent start-ups from even trying to enter the fray, or at least raising the table stakes (funding rates) cost of entry to the game. Adding insult to injury, these acts are taking on active status and encompass stacked obligations from now through 2027.

“While these regulations are certainly noble in purpose, the net balance of how beneficial they will be remains to be seen. Typically, regulations seeking to artificially level the playing field between larger, well-funded market participants do not have a good track record. Information is provided to market players in a manner that technically meets the “letter of the law” but is not of real benefit to other competitors or cannot readily be put to use.

“Laws such as the AI Act, CRA, and DA/DGA theoretically should increase trust and safety in the marketplace as the rules of engagement are clear, consistent, and applicable across the EU member states. However, the risk here is on the burden of execution, not the principles themselves. The EU Commission will need to ensure there are adequate sandbox environments, templates, streamlined audits, and a framework that measures outcomes over bureaucracy, all tailored to the SMB business ecosystem. These frameworks should seek to re-use and leverage existing data across the various acts where feasible to further lower the burden of application and oversight.”

 

 

Jason Wingate, CEO, Emerald Ocean Ltd

 

 

“There is a huge world of difference between good intentions and real-world outcomes. The irony of many of these EU regulations are designed to protect citizens from the potential overreach of Big Tech – but they often just end up building a protective moat for them.

“Take for example a company like Microsoft or Google. These companies can throw an army of lawyers at things like the AI Act or GDPR compliance. When your company is worth billions or trillions – it’s just a cost of doing business.

“But for that small tech startup with great ideas but with limited cash flow and five people? That same compliance just became a crippling distraction.

“In the end, it just boils down like most things to time and money (a business’ most precious resource) being diverted from building their products to deciphering and complying with these rules.

“So in short, yes, it can certainly chase them away.

“Startups thrive on moving fast, experimenting, and innovating. When you introduce a heavy, mandatory compliance framework – you’re forcing them to slow down, and a young, hungry company that slows down dies.

“So sooner or later (and most likely sooner) they will look at the path of least resistance – and that may be outside EU.”

 

Rich Pleeth, CEO and Co-Founder, Finmile

 

 

“The irony is hard to ignore. Regulations are supposed to create trust, but the way Europe is approaching AI risks strangling the very innovation it wants to protect. The US and Asia are moving fast, experimenting, learning, and attracting the best talent. Here in the UK and EU, we’re watching from the sidelines.

“It’s like being in school and told you can only observe the science experiment while everyone else gets to run it. That’s how our entrepreneurs and researchers feel. The result? Companies set up shop elsewhere, talent leaves, and we end up importing the technology rather than building it ourselves.

“Failure is part of innovation, in the US it’s seen as a lesson, in the UK it’s seen as a risk to be avoided. If we keep treating AI like something fragile instead of something to shape and lead, we’ll become spectators in the AI revolution instead of participants.”

 

Elie Berreby, Organic Growth Advisor, SEM King

 

 

“The mindset difference between Europe and the U.S. is mindblowing. As a senior organic search advisor, I’ve seen it firsthand. I now spend most of my time advising U.S. firms, and it’s clear Europe is falling behind.

“Startups in Israel and in the United States move at record speed: they aren’t afraid to ship products that aren’t always fully mature, they test, they sign deals quickly and they cut the red tape.

“In the meantime, the EU regulations are becoming a masterpiece of bureaucracy, and the only thing they regulate out of existence is progress.

“Most EU regulations are like a seat belt designed by a committee: it’s incredibly safe, but the car can’t move. The EU is so busy putting up guardrails, they’ve forgotten how to drive.

“Europe seems so focused on regulating the future, they’re making sure it never arrives.”

 

Leo Labeis, CEO & Founder, REGnosys

 

 

“While regulation is often seen as a constraint, every financial system requires robust rules, and this has helped drive innovation in the EU regtech sector. KPMG’s latest analysis of global fintech funding confirms this trend, highlighting that regtech will continue to gain attention from investors, particularly in the EMEA region, given the increasing complexities associated with ensuring regulatory compliance.

“Firms are developing solutions and innovations to navigate these challenges, turning compliance into an opportunity for growth. With the regtech market set to expand to $85bn by 2032, robust regulation can actually support, rather than hinder, innovation across Europe”

 

Kartik Venkatesh, Global Head of Innovation, GBG

 

 

“Regional mandates will always struggle to keep up with the borderless nature of AI, data flows, and cyberthreats. If we want innovation to flourish, we have to build a framework that’s as global and interoperable as the technology it governs, one rooted in principles that actually work: transparency, choice, and trust.

“Done well, regulation is an opportunity to build the trust and transparency that make people more willing to engage with digital services. And in a world where AI is reshaping everything from shopping to customer service, a privacy-first approach is more than a legal obligation – it’s a competitive advantage.

“But, regulation can’t just be a plaster on the wound, drafted in haste, imposed in fragments, and left for businesses to decode at great cost. We need to be in the room together earlier – regulators, businesses, innovators – before the rules are inked and the unintended consequences are baked in. Too often, regulation arrives without a full understanding of what’s technically possible or commercially sustainable, and the result is legislation that drives entrepreneurs to other markets rather than inviting them to build here.”