Europe's latest attempt to streamline AI regulation is creating winners and losers, with medical device makers warning they're being left in the regulatory dust. The EU's AI Omnibus package, finalized through trilogue negotiations between the Council Presidency and European Parliament, eliminates overlapping compliance requirements for machinery manufacturers but notably excludes the medical technology sector from these simplifications.

What Is the AI Omnibus and Why Does It Matter?

The AI Omnibus represents a significant shift in how Europe approaches AI regulation. Rather than piling new rules on top of existing ones, the compromise agreement removes redundant requirements that were forcing companies to comply with both the AI Act and sector-specific safety regulations simultaneously. For machinery manufacturers, this means no more double conformity assessments, a real reduction in administrative burden and regulatory costs, particularly for small and medium-sized enterprises (SMEs).

The agreement also introduces concrete timelines for implementing rules concerning high-risk AI systems, providing companies with clearer expectations about compliance deadlines. These changes signal that European institutions are beginning to recognize that excessive regulatory overlap can stifle innovation and investment.

Why Are Medical Device Companies Concerned?

Despite earlier proposals from the European Commission aimed at reducing overlapping obligations for AI-powered medical devices, the final compromise left the medical technology sector entirely outside the scope of simplification. This omission has sparked serious concern among industry advocates.

"Leaving the medtech sector outside the scope of simplification is a serious mistake. European medical technology companies are already increasingly losing global competitiveness in terms of the pace of innovation deployment. Additional overlapping regulatory obligations will only deepen this problem and weaken Europe's attractiveness as a place for developing modern technologies," stated Michał Kanownik, President of the Digital Poland Association.

Michał Kanownik, President of the Digital Poland Association

Medical device manufacturers now face a uniquely challenging situation. They must navigate compliance requirements from both the AI Act and existing medical devices legislation, creating the exact kind of regulatory duplication that the AI Omnibus was supposed to eliminate. This dual-layer approach could slow innovation in a sector where speed matters enormously for patient outcomes.

How Can Europe Address the Regulatory Complexity?

• Delegated Acts: The EU should use delegated acts to clarify and reduce duplicative requirements across medical device and AI regulations, allowing the Commission to refine rules without requiring new legislation.
• Sector-Specific Guidance: Develop clear guidance documents specifically for medical technology companies that explain how to comply with both frameworks simultaneously, reducing interpretation uncertainty.
• Broader Simplification Process: Treat the AI Omnibus as a starting point for a comprehensive review of digital legislation, identifying and removing overlapping requirements across all regulated sectors.

The Digital Poland Association has called for exactly this kind of broader approach. Rather than adding more regulatory layers, Europe needs smart and proportionate rules that support competitiveness and digital transformation.

What Does This Mean for Europe's AI Competitiveness?

The stakes are particularly high given Europe's current position in the global AI market. Europe currently accounts for less than 10% of global AI investments, a figure that underscores the continent's struggle to keep pace with the United States and China. Excessive regulatory complexity threatens to widen this gap further by discouraging investment and slowing the deployment of innovative technologies.

Medical device companies represent a critical part of Europe's AI ecosystem. These organizations are developing AI applications that could improve healthcare outcomes across the continent. When regulatory barriers slow their innovation cycles, the entire region loses competitive advantage. Companies facing unclear or duplicative requirements may choose to develop and deploy their technologies in jurisdictions with clearer regulatory pathways.

"What Europe needs today is not additional layers of regulation, but smart and proportionate rules that support European competitiveness, AI development and the digital transformation of the economy. The AI Omnibus should become the starting point for a broader process of genuinely simplifying digital legislation in Europe," emphasized Michał Kanownik.

Michał Kanownik, President of the Digital Poland Association

What Happens Next With Article 5 Prohibitions?

While the AI Omnibus addresses regulatory overlap, the European Commission is simultaneously working to clarify other critical aspects of the AI Act. Three expert studies commissioned by the Commission examine Article 5 of the AI Act, which prohibits particularly harmful AI practices that contradict EU values of human dignity, freedom, equality, and democracy.

These studies analyze specific prohibitions including harmful manipulation, deception, exploitation, social scoring, predictive policing, emotion recognition, and biometric categorization. The research also examines real-time remote biometric identification and its exceptions, along with procedural requirements for untargeted scraping of facial images. This detailed guidance will help companies understand which AI practices are completely off-limits in Europe, providing clarity that complements the AI Omnibus simplifications.

The Commission has incorporated input from these expert studies, stakeholder consultations, Member States, and the European Parliament in preparing guidelines on prohibited practices. This multi-stakeholder approach aims to ensure that prohibitions are clear and enforceable while remaining grounded in European values.

The tension between simplification and comprehensive regulation reflects a fundamental challenge facing European policymakers. The AI Omnibus shows progress on reducing unnecessary complexity, but the exclusion of medical device manufacturers reveals that the work of creating a truly proportionate regulatory framework remains incomplete. As Europe continues refining its AI governance approach, the experiences of companies caught between overlapping requirements will likely drive further reforms.