description: the phenomenon where European Union regulations become the global standard due to market size
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by Anu Bradford · 14 Sep 2020 · 696pp · 184,001 words
Press website at www.oup.com. Äidille ja isälle For mom and dad Contents Preface Introduction: The Brussels Effect Preface to Part One: Theory 1.How the EU Became a Global Regulatory Power 2.The Brussels Effect 3.The Brussels Effect in Context Preface to Part Two: Case Studies 4.Market Competition 5.Digital Economy 6.Consumer Health
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and Safety 7.Environment Preface to Part Three: Assessment 8.Is the Brussels Effect Beneficial? 9.The Future of the Brussels Effect Notes Index Preface the idea for this book was born as a reaction to the nearly constant public commentary about the European Union
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as how much privacy is afforded to internet users in Latin America. These are but a few examples of a phenomenon this book describes as the “Brussels Effect.” The Brussels Effect refers to the EU’s unilateral power to regulate global markets. Without the need to use international institutions or seek other nations’ cooperation, the
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advantages and disadvantages of those alternative methods when contrasted with the Brussels Effect, and discusses when these other channels of influence are likely to complement or, alternatively, substitute the Brussels Effect. In Part II, the book turns to the empirical evidence of the Brussels Effect. Chapters 4–7 illustrate the Brussels Effect by reviewing several areas of regulatory policy where companies
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regulator in these policy areas, and to provide concrete examples of the manifestations of the Brussels Effect. Part III, consisting of chapters 8 and 9, considers the normative implications and reflects on the future of the Brussels Effect. Chapter 8 asks whether the Brussels Effect is beneficial in terms of advancing people’s welfare, both in the EU
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s external relations and its global role—while also showing how the Brussels Effect relates to, and builds on, the influential scholarship on the California Effect. What Is the Brussels Effect? The term the “Brussels Effect” refers to the EU’s unilateral ability to regulate the global marketplace. The Brussels Effect can be unintentional, arising from a set of enabling conditions sustained
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is the interplay between EU regulations and the market forces’ ability to externalize those regulations in different markets that give rise to the Brussels Effect. Further, there are two variants of the Brussels Effect: the “de facto Brussels Effect” and the “de jure Brussels Effect.” The de facto Brussels Effect explains how global corporations respond
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well. This “product versus process” distinction is common in the literature on trade and economic regulation but analytically less central to the Brussels Effect, which accommodates both.2 Several examples of the Brussels Effect deal with product regulation—such as personal data that is available online, the presence of certain chemicals in a product, the
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there is nothing that inherently limits the applicability of the Brussels Effect to the regulation of products as opposed to production methods. Instead, the conditions for the Brussels Effect, described in detail in chapter 2, delineate the types of regulations that can be subject to the Brussels Effect. For example, the Brussels Effect is typically limited to “inelastic targets” and therefore
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amounts to more integration, the growing regulatory agenda has clearly served the Commission’s fundamental goal of furthering European integration. The Brussels Effect itself has been important to this goal—for one, the Brussels Effect helps the Commission level the international playing field, thus mitigating concerns from EU firms of their global competitiveness. This helps
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may export, monitor, and enforce the extension of European policies abroad.47 Similarly, the European Courts’ pro-integration tendencies are likely to be reinforced by the Brussels Effect. The Brussels Effect creates market-based incentives for compliance with EU rules, including with court rulings aimed at enforcing them. This enhanced compliance further helps to preserve the
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global regulatory power over any policy area it desires—market forces successfully globalize some EU regulations but not others, setting limits on the Brussels Effect. This chapter lays the theoretical foundation for the Brussels Effect. It identifies the conditions for, and the mechanism through which, the externalization of one jurisdiction’s standards unfolds. A careful
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promulgate stringent standards across many different policy areas. After reviewing these two factors, the discussion then provides some counterexamples where the missing regulatory propensity limits the Brussels Effect. Ideology: Markets vs. Government Europeans are generally less trusting of markets and more comfortable with government intervention. The state enjoys greater public trust in
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operating on a global marketplace adjust their production patterns to cater to the majorities who may consist of predominantly foreign consumers. The Brussels Effect partially validates and partially challenges this theory. The Brussels Effect differs from the tyranny of the market in that instead of simply the market dictating global standards, it is the duality
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caused by advances in technology. This further suggests that each element has an independent role in explaining the emergence, or the persistence, of the Brussels Effect. 3 The Brussels Effect in Context the brussels effect is certainly not the only way the EU exercises global regulatory influence. In fact, the EU wields norm-setting power through a number of
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harmonization” refers to the more active, consensus-driven harmonization of regulatory standards achieved through negotiations or international institutions. Advantages of the Brussels Effect’s Market-Driven Harmonization As a market-driven harmonization, the Brussels Effect has a distinct advantage for the EU over treaty-driven harmonization: it entails lower contracting costs and limited enforcement costs.
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, depending on the political dynamics surrounding a particular issue, the EU may prefer to pursue treaty-driven harmonization rather than letting the Brussels Effect do the work. The theory underlying the Brussels Effect offers predictions of when the EU is likely to pursue treaty-driven harmonization as opposed to rely on markets to transmit its
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mechanisms of influence, such as consumer pressure, would not influence companies’ behavior alongside with the Brussels Effect. However, these case studies will empirically illustrate how the Brussels Effect has shaped various business practices in the presence of the conditions identified as drivers of the Brussels Effect: market size, regulatory capacity, stringent standards, inelastic targets, and non-divisibility. Some
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global standards. Also, the case studies discussed do not represent the entire universe of regulatory policies that are characterized by the Brussels Effect. There are additional policy areas that lend themselves to the Brussels Effect even though there is no case study dedicated to them. For these reasons, Part II may be viewed as alternatively
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law are worth it in exchange for gaining access to over 500 million consumers. In these instances, the first condition of the Brussels Effect—market size—is met. Several other conditions of the Brussels Effect are typically present as well. As already acknowledged, the EU has built tremendous regulatory capacity in this area. Competition law
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disclosure on a worldwide basis in order to maintain a single worldwide license agreement.98 This is a classic illustration of the Brussels Effect. In another aspect of the same case, however, the Brussels Effect failed to materialize. The Commission also found that Microsoft had been illegally tying its Windows Media Player to its Windows
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and thus reaches foreign companies as long as their conduct affects the EU market. However, these four conditions alone do not trigger the Brussels Effect. The condition that ultimately dictates whether the Brussels Effect occurs is that of non-divisibility. The chapter’s discussion has shown how the question of non-divisibility explains nearly all variance
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of those national regulators in deploying the regulatory capacity that the EU institutions have bestowed upon them. While the above conditions underlying the Brussels Effect are typically present, the occurrence of the Brussels Effect in data privacy often comes down to the existence of non-divisibility. This chapter has shown how most multinational companies today
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. With the introduction of potentially significant variance across the members state regulations, the 2015 decentralization reform may remove that incentive, weakening the Brussels Effect. Regardless of how this particular reform affects the Brussels Effect, the effect is only limited to GMO cultivation, leaving the regulation of GMO sales and marketing untouched. Further, while the EU
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In this last part of the book, the discussion turns to the ongoing and future impact of the Brussels Effect—both by asking the normative question of whether the Brussels Effect is beneficial and to whom (chapter 8) and whether the Brussels Effect will persist or transform in the future (chapter 9). The discussion that follows will therefore be
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well as inevitably indeterminate predictions on its endurance. Chapter 8 takes on the normative charge and examines the various costs and benefits associated with the Brussels Effect, considering whether the Brussels Effect, on balance, advances or reduces people’s welfare—in the EU and outside of it. In assessing the EU’s global regulatory power
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different consumer markets, potentially allowing companies to forgo implementing EU regulations globally? These are among the questions that determine the staying power of the Brussels Effect. Ultimately, they also determine whether the Brussels Effect will give way to, for example, the “Beijing Effect” or gradually fade into history as new forces of economic regulation—whether
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even when those welfare gains are achieved at the cost of foreign sovereignty and without respecting individual political autonomy. The future of the Brussels Effect is also difficult to predict, yet the Brussels Effect may turn out to be surprisingly resilient in the face of both external and internal threats to its existence. The more
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long lasting the Brussels Effect, the more urgent the normative conversation on its merits. And, the more consequential the welfare effects associated with the Brussels Effect, the more important the conversation of how long lasting the Brussels Effect will be. 8 Is the Brussels Effect Beneficial? this book has thus far demonstrated the existence
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and importance of the Brussels Effect in many areas of global regulatory policy, and revealed the powerful impact the
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EU has on global markets as a result. When considering this broad impact, an important question arises: Is the prevalence of the Brussels Effect desirable or undesirable? Of course, since the Brussels Effect creates both winners and losers, the answer to this question likely depends on whom one asks. This chapter addresses the normative question
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, are less well founded. And even the criticism that is more valid needs to be considered on balance with the benefits that the Brussels Effect generates, including the ability of the Brussels Effect to mitigate deficient regulatory capacities or offset sometimes excessive corporate influence abroad, thus enhancing rather than reducing the welfare of foreign consumers.
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This chapter looks at a number of important criticisms of the Brussels Effect, while also considering those criticisms within the context of the benefits that the Brussels Effect entails. Does the Brussels Effect Increase Costs and Deter Innovation? Undoubtedly, by raising the standards for a number of different products and services
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suggest that the concerns of the EU’s regulatory protectionism are likely misplaced or, at best, misinterpretations of a broader regulatory scheme. Does the Brussels Effect Amount to Regulatory Imperialism? The Brussels Effect can also be criticized for its tendency to undermine the regulatory sovereignty of other jurisdictions. In particular, many consumers in developing country markets
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California state government decided to take independent action, culminating in California’s adoption of the California RoHS Law.114 Some developing country governments similarly welcome the Brussels Effect. The Brussels Effect presents these countries with an opportunity to outsource their regulatory pursuits to a more resourceful and experienced agency. Developing country competition agencies, for example,
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as needed, internationally. However, when these assumptions do not hold, the Brussels Effect becomes a less objectionable, and more necessary—second best—alternative. Foreign Attempts to Constrain the Brussels Effect As the earlier discussion suggests, the Brussels Effect produces both costs and benefits. While many of the costs that the Brussels Effect imposes are offset by its benefits, because those costs and
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regulatory environment in which they and their competitors operate. Foreign Governments’ Response to the Brussels Effect Foreign companies are not the only ones who try to push back against the Brussels Effect. Foreign governments, including the United States, are also often critical of the Brussels Effect—whether because they view EU regulations as costly, protectionist, or sovereignty infringing.
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conditions—market size, regulatory capacity, stringent standards, inelastic targets, and non-divisibility—sustaining the Brussels Effect. While the potential of these developments to undermine the Brussels Effect going forward is certainly there, there are also a number of reasons to conclude that the Brussels Effect will be, perhaps surprisingly, resilient in the face of these developments, despite the
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this decline in the EU’s market size and regulatory capacity following Brexit, however, Brexit will be unlikely to dampen the Brussels Effect. If anything, it may have the potential to make the Brussels Effect even more salient. The anti-EU forces in the United Kingdom that campaigned for Brexit argued that the departure from
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show that they can still deliver tangible gains to European citizens. Finally, the result of the current crises discussed may not only be that the Brussels Effect remains intact—the Brussels Effect may even become strengthened. Throughout its history, the EU’s solution to many crises has typically been the pursuit of “more Europe,” as
by Anu Bradford · 25 Sep 2023 · 898pp · 236,779 words
, which often extend these EU regulations across their global business operations in an effort to standardize their products and services worldwide—a phenomenon known as the “Brussels Effect.” While the GDPR may be the posterchild of the EU’s global regulatory influence, this chapter shows how antitrust law, regulation of online content, and
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rules for emerging technologies such as artificial intelligence can be similarly exported through the Brussels Effect. European digital regulations have not only been incorporated into tech companies’ global business practices, but often ingrained in legislation by foreign governments. As democratic governments
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. The discussion reveals how the EU’s antitrust rules and content regulations, including norms covering online hate speech and disinformation, can similarly be externalized through the Brussels Effect, and how artificial intelligence (AI) is likely to be the next frontier of the EU’s global regulatory influence. These policy fields further entrench the
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’s regulatory power, the discussion turns to examine accusations of European “regulatory imperialism” and various other criticisms leveled against this form of global influence. How the Brussels Effect Shapes Data Privacy Policies Around the World Over the past decade, the EU has asserted itself as the most powerful regulator of the digital economy
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, giving it unique leverage to determine how digital technologies are developed and deployed around the world. The Brussels Effect explains how the EU often sets the rules and standards according to which products are built and how business is conducted, in Europe and beyond
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provides perhaps the most pertinent example to illustrate this, as shown below. The Impact of the De Facto Brussels Effect on Companies’ Data Privacy Policies The Brussels Effect is a form of regulatory influence that stems from the combination of the EU’s large consumer market, its powerful regulatory institutions that adopt stringent
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the extensive bureaucratic machinery based in Brussels, which is ready and able to generate them. However, even the EU cannot externalize all of its rules. The Brussels Effect only occurs when the EU regulates inelastic targets, such as consumer markets, as opposed to capital. Unlike capital, consumers will not flee to less regulated
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adhering to a single regulatory standard exceed the benefits of taking advantage of more lax standards in other markets. These five conditions, taken together, underpin the Brussels Effect and explain why the EU today is the only digital power that effectively wields unilateral regulatory influence across global markets. To further unpack these conditions
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EU institutions. While China is in the process of building regulatory institutions, it is likely to be a while before any Beijing Effect would replace the Brussels Effect. The US, on the other hand, would certainly have the requisite regulatory capacity for a Washington Effect. It lacks, however, a sustained political will to
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capacity and the preference for stringent regulations, explains how it has become a global regulatory superpower. But even the EU cannot export all its regulations. The Brussels Effect only takes place when the EU regulates inelastic regulatory targets—that is, targets that cannot be moved to another jurisdiction in order to circumvent EU
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, explains why the GDPR has been so difficult for tech companies to escape, paving way for its adoption as a global standard by these companies. The Brussels Effect is also able to shape multinational companies’ business practices because these companies prefer to follow a uniform data privacy policy across their global conduct. In
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design choices at the outset. As mentioned earlier, large tech giants such as Apple and Microsoft follow this concept,29 further entrenching the Brussels Effect through their uniform product design. Of course, the Brussels Effect cannot be observed every time and everywhere. At times, tech companies have the incentive to introduce divisibility and limit their policy
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preparing.36 Data localization laws may further limit the ability of companies to rely on EU privacy rules as their sole global policy. Ultimately, whether the Brussels Effect allows the EU to transform the world toward its norms simply by regulating the European single market is an empirical question. In recent years, there
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has been a growing scholarly effort to measure the Brussels Effect. Some of this early work does, indeed, offer empirical support for the phenomenon. For example, a 2021 study on whether the GDPR affected multinational companies
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. This effect also holds for websites catering to non-EU audiences that are not formally bound by the GDPR.39 These examples reveal that while the Brussels Effect may be incomplete, it has become a powerful force in transmitting European data protection norms across the global marketplace. Like the exportation of the American
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) in 202159 that includes many provisions that closely resemble the GDPR, illustrating how the EU has been able to export its rights-driven agenda via the Brussels Effect even to countries that embrace a different vision for the digital economy. Like the GDPR, the PIPL applies extraterritorially, defines personal data broadly, and requires
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tech company, the company needs to decide whether to implement the remedy locally or globally. Only when the company opts for a global implementation does the Brussels Effect take place. The 2004 Microsoft case provides an early illustration of this concept.127 After finding that Microsoft had abused its dominant position by illegally
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shopping.131 Although dividing its operations across different markets this way can be appealing for the tech company in that it allows it to evade the Brussels Effect, this option is not always available either for economic, technological, or reputational reasons. At times, tech companies have the incentive to extend their remedies worldwide
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toward the EU approach—even in the US, which has thus far been one of the last frontiers untouched by the Brussels Effect. Artificial Intelligence Artificial intelligence may well be the next frontier of the Brussels Effect. The EU is taking a lead in regulating artificial intelligence with its ambitious and comprehensive regulatory proposal on AI
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seek to take back control from the tech companies and reassert their role in shaping the digital economy. Foreign Tech Companies and Governments’ Concern With the Brussels Effect The Brussels Effect is neither universally celebrated nor derided outside the EU. While some foreign stakeholders welcome the global reach of the EU’s rights-protective regulations, others
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in general. But there is also a specific concern among some companies and governments regarding the externalization of that regulatory model via the Brussels Effect. In some cases, this resentment of the Brussels Effect has caused foreign companies and foreign governments to look for ways to counter the EU’s digital regulations that adversely affect them
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the EU and around the world, as countries are seeking to enhance their “digital sovereignty” in a volatile world. Another strand of criticism leveled against the Brussels Effect relates to its inherent ability to undermine democratic institutions in foreign countries. According to this view, the EU’s global regulatory influence compromises the democratic
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govern its global operations, or if Google decides to offer GDPR protections to internet users in the US or across Latin America. However, even if the Brussels Effect does not amount to a new form of imperialism, in practice it does constrain foreign governments’ regulatory freedom by often overriding their preferences. For instance
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US companies. After all, American citizens cannot hold European politicians accountable for decisions they disagree with, compromising their political autonomy. This countermajoritarian element inherent in the Brussels Effect arguably undermines the ability of foreign governments to serve their citizens in accordance with their democratically established preferences. The US government may therefore argue that
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are typically balanced with the influence that civil society groups exert over regulation.192 Thus, an argument—even if potentially a controversial one—exists that the Brussels Effect may partially offset the overrepresentation of corporate interests in the US by restoring some of the consumer interests that have been overridden in the process
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occasional criticism, it is important to recognize that not all foreign actors view the EU’s global regulatory influence as sovereignty-infringing. Some even welcome the Brussels Effect. Public opinion surveys indicate that most Americans (75 percent) think there should be more governmental regulation of what companies can do with personal data, and
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of control over their personal information that so many others prosper from the EU’s strong regulation.”198 This suggests that any foreign criticism of the Brussels Effect is unlikely to be uniform, and examples of foreign stakeholders embracing the reach of the European rights-driven regulatory model abound as well. How Tech
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Companies and Governments Are Seeking to Counter the Brussels Effect Even when foreign companies or governments resent the EU’s global regulatory power, it is difficult for them to do much about it, highlighting why
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are particularly high: at best, being able to shape European regulatory response gives the successful lobbyist a say over not just European, but global, regulation. The Brussels Effect has given foreign firms, including tech companies, an incentive to invest heavily in the EU regulatory process through lobbying, with the Commission and the Parliament
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data controllers, backed by severe penalties. Despite their concerted efforts and growing lobbying budgets, foreign companies have not to date been able to substantially mitigate the Brussels Effect through lobbying. They may be able to win some concessions, but often their influence is offset by that of citizen groups and other nonbusiness actors
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‘anticompetitive conduct,’ ”212 in addition to supporting the EU’s proposed DMA.213 These examples illustrate how some foreign firms are occasionally able to turn the Brussels Effect to their advantage—even if only by shifting the costs of European digital regulations to their competitors. Tech companies are not alone in struggling to
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limited avenue for foreign governments to mitigate the costs they incur through the external effect of EU regulations. At times, the WTO may even facilitate the Brussels Effect by constraining the EU’s trading partners’ ability to respond with unilateral retaliation. Had the US, for instance, imposed trade sanctions on the EU when
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opportunity for economic gains for both parties. Abandoning the negotiations in 2019, the US directly undermined its ability to influence global regulatory standards, inadvertently cementing the Brussels Effect. Now, the US and the EU are seeking to cooperate more closely on technology standards through the newly established Transatlantic Trade and Technology Council,216
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starts embracing digital protectionism, there is a risk that techno-protectionism will become the global norm. After all, EU regulators should keep in mind that the Brussels Effect—the EU’s ability to externalize its regulations—is a potent mechanism for exporting both good and bad regulations alike. The EU has repeatedly acknowledged
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Just Started, Foreign Pol’y (Jan. 16 2020), https://foreignpolicy.com/2020/01/16/europe-technology-sovereignty-von-der-leyen/. 44.See generally Anu Bradford, The Brussels Effect: How the European Union Rules the World (2020). 45.Jack Goldsmith, The Failure of Internet Freedom, Knight First Amend. Inst. (June 13, 2018), https://knightcolumbia
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Facebook for Illegal Monopolization (Dec. 9, 2020), https://www.ftc.gov/news-events/press-releases/2020/12/ftc-sues-facebook-illegal-monopolization. 102.Anu Bradford, The Brussels Effect: How the European Union Rules the World 147–155 (2020). 103.Press Release, The White House, Fact Sheet: Plan to Protect Privacy in the Internet
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, 2018), https://www.ft.com/content/b4d47e04-9727-11e8-95f8-8640db9060a7. 193.European Approach to Artificial Intelligence, supra note 179, at 5. 194.Anu Bradford, The Brussels Effect: How the European Union Rules the World 238 (2020). 195.Vincent Manancourt & Mark Scott, Whatsapp Hit With €225M Privacy Fine, Politico (Sep. 2, 2021), https
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, 94 N.Y.U. L. Rev. 662 (2019); René Mahieu, Hadi Asghari, Christopher Parsons, Joris van Hoboken, Masashi Crete-Nishihata, Andrew Hilts, & Siena Anstis, Measuring the Brussels Effect Through Access Requests: Has the European General Data Protection Regulation Influenced the Data Protection Rights of Canadian Citizens?, 11 Journal of Information Policy 301 (2021
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Not Build New Ones, Fin. Times (Oct. 19, 2020), https://www.ft.com/content/98cf847c-96f9-4558-9a30-7d72ea4e79c2. 164.Id. 165.See Anu Bradford, The Brussels Effect 241–247 (2020). 166.See Ian Wishart, Microsoft Files Anti-Corruption Complaint Against Google, Politico (Mar. 31, 2011), https://www.politico.eu/article/microsoft-files
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Move Towards Data Localisation, Fin. Times (Sep. 29, 2018), https://www.ft.com/content/92bb34a8-b4e5-11e8-bbc3-ccd7de085ffe. 37.René Mahieu et al., Measuring the Brussels Effect Through Access Requests: Has the European General Data Protection Regulation Influenced the Data Protection Rights of Canadian Citizens?, 11 J. Jnfo. Pol’y. 301 (2021
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food delivery services, 128–29 foreign companies. see also tech companies; specific companies by name Chinese restrictions on, 76, 203–5 concern with the Brussels effect, 353–59 countermeasures against the Brussels effect, 356–59 lobbying activity, 356–58 Foreign Investment Risk Review Modernization Act (FIRRMA) (US), 195 foreign students, 375 foreign subsidies, 134 FOSTA (Allow
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, 44–45 Public Company Accounting and Oversight Board (PCAOB) (US), 96, 177–78 public opinion Chinese citizen response to surveillance, 88–91 common criticism of the Brussels effect, 353–56 management of, 299–300 support for regulation, 251–52, 362–64 “Public Pledge on Self-Regulation and Professional Ethics for China Internet Industry
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–3, 151–52, 164–79, 189–90, 192–96, 208–9, 215–16, 262–63 Clean Telcos, 320–21 concern with the Brussels effect, 353–59 content moderation, 338–39 countermeasures against the Brussels effect, 356–59 custodians of the internet, 141 data collection from, 61 data privacy policies, 326–32 European, 108, 136–37 global
by Ivan Krastev · 7 May 2017 · 100pp · 31,338 words
in Hungary and Jarosław Kaczyński in Poland and the “illiberal turn” in most of central Europe has forced many commentators to upend their view of the “Brussels effect” on the process of democratic consolidation in central Europe. In the view of political scientists James Dawson and Sean Hanley, marrying the process of democratization
by Bruno Macaes · 25 Jan 2018 · 287pp · 95,152 words
Power’, Lowry Institute Analysis, November 2013, p. 5. 4. William J. Norris, Chinese Economic Statecraft (Cornell University Press, 2016), pp. 62–3. 5. Anu Bradford, ‘The Brussels Effect’, Northwestern University Law Review (2012). 6. Mark Entin and Ekaterina Entina, ‘The European Part of Russia’s Geopolitical Project: Correcting the Mistakes. Part 2’, Russian
by Paul Scharre · 18 Jan 2023
, http://en.kremlin.ru/supplement/5770. 8European nations are leaning into regulating AI: Anu Bradford, The Brussels Effect (Columbia Law School, 2012), https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=1275&context=faculty_scholarship; Anu Bradford, The Brussels Effect: How the European Union Rules the World (Oxford Scholarship Online, 2020), https://oxford.universitypressscholarship.com/view
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/2018/08/15/15-unexpected-consequences-of-gdpr/#68020b3c94ad. 112“race to the top”: Anu Bradford, The Brussels Effect (Columbia Law School, 2012), https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=1275&context=faculty_scholarship; Anu Bradford, The Brussels Effect: How the European Union Rules the World (Oxford Scholarship Online, 2020), https://oxford.universitypressscholarship.com