The European Union is, by its own admission, the world's most prolific rule-maker. Between 2019 and 2024 the bloc passed nearly 14,000 legal acts. Businesses spend around €150bn a year complying with EU regulations. A supply-chain disclosure regulation adopted in 2022 requires large firms to provide up to 1,155 data points on their global supply chains, in effect forcing them to recruit staff dedicated to tracking labour conditions and other metrics in far-flung countries. Rules hemming in artificial-intelligence models were drafted, in large part, before Silicon Valley had devised the models they were to regulate.
The EU's regulatory reach extends beyond its borders through the "Brussels effect": companies from around the world must bend to EU rules if they want to sell to European consumers, often forcing American firms to adopt them across their global operations for simplicity's sake.
In 2021 the European Commission promised that at least one piece of legislation would be cut for every one coming into force. When that proved insufficient, a plan for "simplification" was devised—the EU would keep old rules but make compliance easier, targeting a 25% cut in compliance costs. By late 2025 Ursula von der Leyen, the commission's president, had begun speaking of outright "deregulation"—scrapping rules entirely. Six wide-ranging "omnibus" laws were tabled, covering supply-chain disclosure, farming, defence and digital regulation, including a rowing-back of the hastily devised AI rules.
By the EU's own estimates, however, new laws in the pipeline could add around €80bn a year to annual business costs—far more than was being cut. The first omnibus law, announced in February 2025, had yet to be formally adopted by November; after initially being voted down by the European Parliament, it passed only with the support of right-wing populist MEPs.
Mega-mergers have long been tough to pull off in the EU. In 2019 the commission blocked the combination of France's Alstom and the rail division of Germany's Siemens, the continent's two largest train-makers. A hallowed 2024 report by Mario Draghi on the bloc's economic woes argued that the EU's strict approach to mergers prevented its firms achieving the scale needed to compete abroad. Ursula von der Leyen asked Teresa Ribera, the competition chief, to develop new merger guidelines that would ease the way for European firms to reach global prominence; a draft is expected in early 2026.
In many EU industries consolidation is already high: among listed firms across 40 industries, in 22 cases the biggest four companies by sales captured over three-quarters of the industry total, compared with 16 in America. Telecoms and banking, however, remain relatively fragmented. America's four biggest banks account for 54% of their industry's total assets, compared with 38% in the EU. The top four American telecoms firms account for 94% of the market, whereas the top 17 make up the same share in the EU. In October 2025 Airbus, Leonardo and Thales announced plans to merge their satellite-space divisions in response to competition from SpaceX's Starlink. On March 22nd 2026 Poste Italiane, which runs Italy's national mail service, made a bid to acquire Telecom Italia. National competition authorities remain a further obstacle: UniCredit abandoned its pursuit of Banca Popolare di Milano following opposition from the Italian government, and its efforts to acquire Commerzbank have been resisted by Germany's government.
Grabel's Law: 2 is not equal to 3 -- not even for large values of 2.