Legal challenges of artificial intelligence in the European Union’s digital economy

Abstract

This article critically examines the legal and regulatory challenges posed by artificial intelligence (AI) within the European Union’s (EU) digital economy, focusing on the recently adopted EU Ai Act (Regulation 2024/1689). While previous studies have addressed AI's ethical and theoretical dimensions, this research fills a gap by analyzing the Act’s practical application across its temporal, personal, material, and territorial scopes. The study adopts a qualitative legal methodology, integrating doctrinal interpretation, comparative analysis, and systemic review of EU and international legal instruments. Key findings reveal that the EU AI Act establishes a pioneering risk-based regulatory framework, distinguishing itself through strong safeguards for fundamental rights, transparency, and human oversight. However, critical limitations remain, including ambiguous high-risk classifications, reliance on provider self-assessment, and exemptions for national security that may undermine human rights protections. The article compares the EU approach with those of the United States and China, illustrating divergent models of AI regulation and their global implications. It argues that while the EU AI Act sets an ambitious precedent, its success depends on effective enforcement, stakeholder compliance, and international regulatory convergence. By addressing these challenges, the EU can shape a globally influential framework for ethical and responsible AI deployment. This study contributes to the evolving academic and policy debate on AI governance by offering practical insights and recommendations for future research and legal development.