This paper explores policy process and political drivers of the reform of the framework for Artificial Intelligence (AI) regulation and governance in the EU. Since 2017 the EU has been developing an integrated policy to tighten control and to ensure consumer protection and fundamental rights. This policy reform is theoretically interesting, raising the question of which conceptual approaches better explain it, and it is also empirically relevant, addressing the link between risk regulation and digital markets in Europe. This paper explores the policy reform by process tracing analysis using a variety of primary and secondary sources. It evaluates the analytical leverage of three theoretical frameworks and a set of derived testable hypotheses concerning the co-evolution of global economic competition, EU institutions, and policy preferences of domestic actors in shaping risk-based, incremental approach to AI regulation in the EU. It is argued that all three are key drivers shaping the policy reform and explain the various stages of the policy-making process, namely, problem definition, agenda-setting and decision-making.
