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Is the EU the World’s Unsung Superpower?

Podcasts Apr 21, 2020 Anu Bradford and Elmira Bayrasli

When it comes to commerce, where Europe leads, others follow. The reason is simple: it’s too costly for global companies not to adopt a one-size-fits-all approach to their products.

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Anu Bradford

Writing for PS since 2013
9 Commentaries

Anu Bradford, Professor of Law and International Organization at Columbia Law School, is the author of the forthcoming Digital Empires: The Global Battle to Regulate Technology (Oxford University Press, 2023).

Elmira Bayrasli

Writing for PS since 2016
3 Commentaries

Elmira Bayrasli is the co-founder and CEO of Foreign Policy Interrupted and the author of From The Other Side of The World: Extraordinary Entrepreneurs, Unlikely Places.

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j. von Hettlingen Apr 24, 2020

In her interview with Elmira Bayrasli, Anu Bradford, the Finnish-American legal scholar explains how the EU rules the world in her new book “The Brussels Effect”. It is about the influence the EU exerts by shaping rules and technical standards adopted by companies and countries around the world. Although Europe is not home to any global tech giants, when it comes to business rules, the EU shapes digital governance worldwide.
The size and attractiveness of its market have catapulted the bloc into a regulatory superpower. Companies selling into multiple markets want a one-size-fits-all approach to regulation and products, perhaps even more so in a post-Covid-19 world grappling with uncertainty. This may effectively be giving the EU an edge in setting standards far beyond its borders.
Global companies can not afford to ignore the terms set by one of the world’s largest, and most affluent markets, according to Bradford. If businesses seek to avoid producing different versions of the same product for different markets, many comply with EU rules as the price for doing business. These rules need to be agreed by consensus, allowing companies and consumer champions, or environmental activists to have a say. This dynamic sets a high standard that firms with global supply chains tend to accept.
As the world’s antitrust chief, the EU has become a thorn in global tech giants’ side, due to their compliance with its General Data Protection Regulation (GDPR), which keeps their market behaviour in check, even when they can operate free of regulatory constraints in their home countries. Between 2017 and 2019, the EU imposed almost $10 billion in fines on Google for abusing its monopoly in online advertising. Moreover, EU regulators often determine how big tech companies gather, process, store, and monetise users’ personal data.
According to Bradford, the EU wields similar power across many other domains, from environmental protection to consumer health and safety. With the European Green Deal on the agenda, there will be energy efficiency and environmental rules to meet EU climate goals, which may also be adopted by companies and emulated by governments across the globe. To date, nearly 120 countries have adopted privacy laws, and most of these resemble the EU’s data-protection regime.
Even Brexit-bound Britain is feeling the “Brussels Effect.” Although Britain’s move to leave the EU was partly motivated by the desire to make its own rules, Brexit will not free the UK from EU’s rules. Unlike the Eurosceptic government, businesses, willing to comply with multiple regulatory regimes, have been pushing for a deal that keeps the UK closely aligned with the bloc, allowing them to sell into this single market of 450 million people. When it comes to internal EU debate, Britain’s disappearance will eliminate a pro-market voice that often countered French and German pushes for greater regulation and intervention.
Bradford says the US has thus far been reluctant to emulate the EU, but even the US-based tech giants concede that the global momentum has shifted in Europe’s favour. US policymakers may not be able to remain forever as the lone voice defending American data privacy exceptionalism, especially as its own companies follow the rules adopted in Europe. Besides, politics are also moving in favour of the EU’s regulatory approach, which will make resistance more difficult, even for companies and governments harbouring reservations about the EU’s digital paternalism.
Whereas the American-style techno-libertarianism and the Chinese digital authoritarianism hardly win hearts and minds in the battle of ideas over digital global governance, the EU’s regulatory model seems a more palatable alternative to protect the public's interest, keeping corporate power in check, while preserving democratic structure and institutions.
But the EU is not leading the regulatory policy in every area, particularly emerging technologies such as artificial intelligence that are dominated by Chinese and American companies. Weary about the excesses such industries may bring, the EU tech queen, Margrethe Vestager aims to ensure technology deployed in Europe is transparent and has human oversight, perhaps with more stringent guidelines than elsewhere.
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