TheBrussels effect is the process ofEuropean Union (EU) regulations spreading well beyond the EU's borders. Through the Brussels effect, regulated entities, especiallycorporations, end up complying with EU laws even outside the EU for a variety of reasons. The effect is named after the city ofBrussels, the de facto capital of the European Union, used as ametonym for the European Union.
The combination of market size, market importance,[1] relatively stringent standards and regulatory capacity[2] of the European Union can have the effect that firms trading internationally find that it is not economically, legally or technically practical to maintain lower standards in non-EU markets. Non-EU companies exporting globally can find that it is beneficial to adopt standards set in Brussels uniformly throughout their business.[3][4]
The termBrussels effect was coined in 2012 by ProfessorAnu Bradford of Columbia Law School[1][5][6]. Scholars could so far not empirically verify the limits of the Brussels effect in international law, especiallyWorld Trade Organization (WTO) law.[7] Furthermore, for the Brussels effect to occur, it was shown that not all prerequisites identified by Bradford have to occur cumulatively.[7] Research has indicated that the EU's regulatory power varies substantially depending on the context of the regulation involved.[8][9]
Since its invention, the Brussels Effect has become a major point of reference in European policy discussions on the EU's global power. However, scholarship has also noted the one-directionality of the Brussels Effect framework, as it typically excludes for example the attempts by foreign firms and states to influence EU legislation. Moreover, it has been noted that the impact of the rules instigated by the EU can evolve significantly over time, as they get for example challenged in courts.[10]
The October 2000 $42 billion proposed acquisition of US-basedHoneywell by US-basedGeneral Electric was blocked by the EU antitrust authorities on the grounds of risking ahorizontal monopoly in jet engines. The merger could not proceed because, despite theAmerican Department of Justice having already approved the merger between these two US-based entities, it was not legally possible to let the acquisition proceed in one important market, but not in another.[1][11]
US-based multinationalDow Chemical announced in 2006 it would comply with the EU'sRegistration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulation for the production and use of chemical substances across its global operation.[1][12][13]
In 2012 the EU included aviation into its existingEmission Trading Scheme. This means that any airline, regardless of their country of origin, has to purchase emissions permits for any flights within theEuropean Economic Area.[14] The cost of complying with EU aviation emission regulation puts pressure on manufacturers to design airplanes with improved efficiency and reduced emissions. As major airlines would not likely purchase airplanes specifically to fly outside the EEA, the EU's stricter aviation standards have an impact on global airplane fleets, regardless of the jurisdiction of the airline.[1][15]
With the introduction of theData Protection Directive in 1995 the EU had opted for a strict top-down approach todata privacy.[16] Its successor, the EU'sGeneral Data Protection Regulation (GDPR), was adopted on 14 April 2016 and had a global effect.[17][18][19] In 2017, during negotiations for a new Japan-EU trade deal, Japan set up an independent agency to handle privacy complaints to conform with the EU's new privacy regulation.[20]
Facebook announced in April 2018 that it would implement parts of the GDPR globally.[21][22] Sonos announced in April 2018 that it would implement the GDPR globally,[23] and Microsoft announced in May 2018 that it would implement GDPR compliance for all its customers globally.[24]
The Brussels effect can be observed in two regulatory frameworks that regulate the exploitation of natural resources, theConflict Minerals Regulation andCountry by Country Reporting Rules for payments to governments.[25][clarification needed]
In October 2022 the European Parliament adopteda directive which required many consumer electronic devices – notably mobile phones – to adoptUSB-C as auniversal charger by 2024.[26] This was seen as being particularly applicable toApple and itsiPhone product range which had, until then, rejected standardisation.[27] The expectation was that, due to the EU's large marketplace, the EU-specific regulation would nonetheless result in a change in how products were manufactured for sale in other countries (to ensure a single global product), and that other jurisdictions would adopt equivalent legislation.[28] As a result, the next iPhone released following the announcement of the directive,iPhone 15, and all subsequent iPhones, have used USB-C charging.
Analysts have noted Brussels effects in the manner in which the European Union has designed and implemented restrictions on online speech. Legal scholar Dawn Carla Nunziato noted that theDigital Services Act (DSA) could not be reconciled with American law and would "create tension and conflict with the U.S. speech regime applicable to social media platforms."[29] Techonology policy analyst Jennifer Huddleston, writing for theCato Institute, observed regarding the DSA, GDPR and related efforts, "While this jawboning and direct censorship by foreign actors does not carry an obvious effect on the United States, it limits the diversity of sources online and forces platforms to possibly change their content moderation policies to adapt to the threats and regulations of countries that seek to limit freedom of expression."[30]The Economist characterized the 2024 exchange betweenElon Musk andTheirry Breton regarding the interview onX ofDonald Trump and Musk's subsequent disdain of the DSA as defiance of the Brussels effect.[31]
Coined by ProfessorAnu Bradford, the term was named after the similarCalifornia effect that can be seen within the United States.[32]
{{cite journal}}:Cite journal requires|journal= (help)