Global Impact of the EU’s Digital Omnibus and AI Act

The Digital Omnibus and AI Act’s Global Ripple Effects

Why EU Digital Rules Don’t Stay in Europe: The Digital Omnibus and AI Act’s global impact is increasingly felt by multinational organizations. For years, the European regulatory landscape has inspired both respect and caution. The GDPR reset global privacy governance expectations, and now the EU AI Act is doing the same for artificial intelligence. The new Digital Omnibus initiative aims to modernize and streamline complex EU digital rules.

Key Reality: EU digital rules do not remain confined to Europe; they rapidly shape global obligations. What occurs in Brussels reflects in cities like New York, Singapore, Sydney, and São Paulo months later. Organizations without EU offices often adopt EU-aligned practices due to customer, partner, auditor, and regulatory expectations.

Why Do EU Digital Rules Continue to Shape Global Governance?

Companies frequently underestimate the EU’s role in establishing global digital governance norms. Three forces make this inevitable:

1. The EU Regulates Through Principles, Not Technology: GDPR established transparency, purpose limitation, minimization, rights, and accountability principles that adapt over time. The EU AI Act follows a similar pattern with risk tiers, governance, documentation, and oversight.
2. Operational Consistency: Multinational companies cannot maintain separate operating models for different regions. A U.S. company serving Europe cannot run a different privacy program for the EU versus other regions without incurring operational, financial, and legal risks.
3. Global Enforcement: Regulators outside Europe often borrow EU concepts because they are mature, well-articulated, and court-tested. What the EU defines as “responsible” quickly becomes the global standard.

Inside the Digital Omnibus

The Digital Omnibus seeks to harmonize the regulatory landscape created by various EU directives, including the GDPR, ePrivacy Directive, Data Act, and the EU AI Act. Its goals include:

• Streamlining consent rules
• Reducing cookie fatigue
• Enabling broader use of pseudonymized data
• Clarifying legal bases for AI model training
• Creating a unified analytics framework
• Simplifying cross-border inconsistencies
• Reducing friction for AI development
• Preserving strong protections while updating enforcement

Paradox: While it aims to simplify regulations, the Digital Omnibus does not necessarily simplify operational governance.

The TurboTax Analogy

Consider a scenario where U.S. tax law is simplified—terms consolidated, sections reorganized, and forms rewritten. Though the law appears clearer, companies must relearn workflows, update systems, and retrain teams, creating a significant operational burden. This principle applies to the Digital Omnibus changes.

New AI Training Rule

One major Omnibus proposal concerns AI training. The EU is considering allowing personal data use for AI model training based on legitimate interest rather than requiring consent. This shift implies:

• Innovation Flexibility: Consent-driven training is challenging to scale, especially in regulated sectors like finance and healthcare.
• Responsibility Shift: Organizations will need enhanced governance programs to meet new legality, documentation, and accountability expectations.
• Increased Oversight: Regulators will expect proof of compliance, necessitating robust governance frameworks.

Data Sovereignty: A Resurgent Concern

Brussels signals a return to data sovereignty as governments view cloud dependence as a strategic risk. With 90% of European data hosted on U.S. infrastructure, countries like the Netherlands aim to increase EU-based cloud usage significantly. This shift will affect procurement, cloud architecture, and vendor risk workflows globally.

The U.S. Landscape: Fragmentation

In contrast, the U.S. faces greater regulatory fragmentation with numerous state-level AI laws and growing scrutiny from the FTC. Companies must swiftly adapt to this evolving environment.

The Global Ripple Effects

Even organizations without a European presence will feel the impact of the EU AI Act and Digital Omnibus:

• Vendor Demands: Vendors will embed EU-aligned requirements into their platforms.
• Customer Expectations: Customers will increasingly inquire about explainability and governance.
• Auditor and Board Expectations: Boards will expect traceability and defensible workflows.
• Workforce Mobility: Leaders with EU experience will bring these expectations to U.S. firms.
• Litigation Exposure: U.S. plaintiffs may cite EU privacy and AI concepts in claims.

Conclusion: Governance for Change

Organizations must now build adaptable governance frameworks. The Digital Omnibus signals an opportunity for companies to modernize governance processes and adopt the right tools. Early action will yield competitive advantages in compliance maturity, transparency, and trust.

Five Actions Global Organizations Should Take

1. Map AI and analytics use cases to EU and U.S. rules.
2. Reevaluate cross-border data flows with sovereignty in mind.
3. Distribute governance roles across functions.
4. Embed documentation into existing workflows.
5. Prepare for regulation as a moving target.

This is a critical moment for organizations to understand the Digital Omnibus implications and position themselves for future governance challenges.