Brussels effect 2.0: regulatory globalization, power and respect of fundamental rights

So far 2024 has been a year full of landmarks in technology regulation. The European legislator has seen most of its recent efforts enter fully into force, from the AI Act and the Data Act, to the Digital Service Act and the Digital Markets Act, and the EU Media Freedom Act. These are the first regulations worldwide that introduce new obligations for the development and deployment of AI technology within the EU digital single market and that set rules for online platforms in terms of market power, business model, systemic risk assessment and mitigation, and a liability regime for the moderation of user-generated illegal content, disseminated over their platforms. Platform regulation and the use of AI systems are becoming increasingly intertwined, as the preamble of the AI Act acknowledges. Any company that wants to offer of AI services and products or to use of AI algorithms on Union citizens needs to be compliant with the new Act. At the same time, online platforms that offer services like e.g. social networks, marketplaces, search engines, video-streaming services, app stores, and content-sharing platforms within the EU digital singe market are required to respect the new obligations.

Multiple pieces of legislations issued at the intersection between AI and platform regulation within short require efforts to find consistency in their application. Not only for European parties but also for external players that want to enter the Union market. Moreover, the EU proclivity for regulatory efforts have shown how the EU legislator seem to be on a sort-of perennial quest to regulate, reform, modernise, set standards, and introduce digital regulations that might become a sort of ‘universal standard’. Being the first to regulate has become a policy goal in itself, to prove the continual power of the EU internal market and the relevance of the EU’s policy strategy. The question that arises in light of the implementation of these landmark regulations is: which impact will these very productive efforts originating from Brussels have on the rest of the world?

In the past, the EU has proven its virtue in being the first to regulate digital environment and new forms of technology with the aim of protecting its citizens. These legislative efforts have often had the ability to migrate outside of the European borders and externalize their regimes through market mechanisms, globalization of standards, international agreements and outsourcing practices. This emerged largely as a by-product of that internal goal rather than as a result of some conscious effort to engage in In 2012 Anu Bradford tried to give a definition to this phenomenon of “regulatory imperialism” originating from the Union. She described it as ‘Brussels Effect’, or “the unprecedented and deeply underestimated global power that the European Union is exercising through its legal institutions and standards, and how it successfully exports that influence to the rest of the world”. For Europe to dictate rules for global commerce, it is not enough to be “standard-setter”. It seems important to have, among other things, a significant regulatory capacity (often with stricter terms than others) and the ability to prove that “the benefits of adopting a uniform global standard exceed the benefits of adhering to multiple, including laxer, regulatory standards”.

As mentioned, there are multiple recent examples of the EU’s standard-setting aspirations. For instance, the European digital strategy include two centrepieces. The Digital Markets Act is the first regulatory tools to comprehensively regulate the power of the largest digital companies it identifies as “gatekeepers”, which provide core platform services, in order to make the markets in the digital sector fairer, more competitive and more contestable. These Gatekeepers have to comply with clearly defined obligations and prohibitions, listed in the regulation. Despite having entered into force in November 2022, the full application of its obligations began in March 2024. As of today, the DMA complements, but does not change EU competition rules.

Simultaneously, the EU adopted the Digital Service Act and, as of February 2024, its rules apply to all platforms. This Regulation represents a major development in the EU and further beyond thanks to its new legal responsibilities for all intermediaries to prevent illegal and harmful activities online, and the spread of disinformation. It ensures new rights for users and reinforces the protection of fundamental rights. Out of the significant areas of platform regulation it covers, mention can be made to the new regime for online platforms’ liability, the implementation of ‘notice and action’ and redress mechanisms, obligations for systemic risk assessment and mitigation.

Other examples from this year that showcases EU efforts in regulatory globalization are the EU Media Freedom Act and the Regulation on transparency and targeting of political advertising . On a global scale, the EU remains a stronghold for free and pluralist media, setting a standard for every democracy. Taking into account the recent digital transformation , the Act puts in place a new framework to protect media pluralism and independence, and to ensure that public and private media providers can operate more easily across the internal market, without undue pressures. Instead, the Regulation, as the name suggests, provides harmonised rules on transparency and related due diligence obligations for the provision of political advertising services and the use of targeting techniques in the context of election campaigns. These two regulations align with what appears to be an emerging consensus on necessary measures to support election integrity on online (in particular on social media) , especially in a historic year where over 70% of the world population will be called to the polls.

In the context of the European strategy for data, in January adopted the Data Act . This is regulation harmonises rules on fair access to and use of data and it made a significant contribution to the Union’s Digital Decade’s objective of advancing digital transformation by 2030. The Data Strategy focuses on putting people first when developing technology, and in promoting European values and rights in the digital world. The new measures of the Data Act complement the 2023 EU Data Governance Act , which seeks to increase trust in data sharing and availability, to overcome technical obstacles to the reuse of data and to introduce mechanisms at EU level for strategic development of sectors such as health, environment, energy, agriculture, mobility, finance, manufacturing, public administration and skills.

Last but not least, in the context of AI technology the overmentioned AI Act represents a new piece of legislation of particular importance at global level. Entered into force in August 2024, this landmark regulation is the first-ever legal framework addressing the design, development and deployment of AI technology marketed to or used on the general public. Following a risk-based approach, it provides developers with requirements and obligations regarding specific uses of AI and it goes as far as prohibiting certain uses within the EU internal market with intent of ensuring that AI systems are safe and respect fundamental rights and European values. The Act positions Europe at a leading role globally, to maximise its potential to compete globally. Within the EU Coordinated Plan on Artificial Intelligence, Europe committed to accelerate investment in AI, implement ad hoc strategies and align AI policies to prevent fragmentation within its market.

It is undeniable that these recent laws in the sectors of AI, data, technology and online platforms regulation have caught the attention of many legislators across the globe, who are intent to keep up with the EU legislator’s regulatory efforts. Mentions can be made to the U.S. Executive Order on AI which defines the administration’s policy goals regarding this technology and, despite non introducing hard-law obligations, it orders national executive agencies to take actions pursuant to the safe, secure, and trustworthy development AI. Another examples comes from Singapore’s Online Safety Act or the long-expected UK Online Safety Bill which contain common elements from European on technology and platforms regulatory regimes. In Asia, China is a frontrunner in AI regulation, introducing mandatory technology-specific laws to address different risks associated with AI. However, in contrast to the EU AI Act, prescriptive of a risk classification for AI systems which it pairs with high non-compliance fines, the Chinese efforts target specific AI technologies and criminalises violations.

What these efforts have in common, however, is that they seem to come from a desire to “keep-up” with the recent wave of EU regulatory endeavours in the field of technology innovation and digital markets. In a sort of “Bruxelles effect 2.0”, this second iteration of the phenomenon does not seem any longer about the EU setting standards and externalizing its laws in a ‘unilateral regulatory globalization’ effect. Instead, it seems more like the case of the EU inspiring – albeit unwillingly – other legislators to keep up with their regulatory efforts. As Bradford predicted, “unilateral regulatory globalization does not need to elicit a formal regulatory response from another nation – often there is no race to the top or de jure Brussels Effect” , instead it’s often the case that multinational corporations find incentives to standardize their production globally and adhere to a single rule, often the strictest one, and participate in its conversion into a global rule. The EU has taken the lead with the strictest rules and the strongest protection of fundamental rights. For instance, the Digital Service Act forces global online platforms to assess any actual or foreseeable negative effects for the exercise of fundamental rights, thus prioritizing users’ rights over their right to conduct a business and make profits. The AI act also contains an obligation to perform an assessment of the impact on fundamental rights that the use of AI systems may produce. In other words, the new EU obligations for digital platforms and AI systems developers put at the forefront fundamental rights’ protection. This might explain the reasons why Europe has been and still is the predominant regulator of global commerce, and why it can still successfully export certain norms and lead the regulatory efforts.

To conclude, the Brussels Effect was a matter of power and answered the question of who is powerful and why. In its new 2.0 version, the question of power has evolved from ‘who has the power’ to ‘what type of power matters’ today. For over two decades, Brussels has been the gravitational centre of regulations in the sector of technology, online platforms and AI. The success of these regulatory strategies can be measured by the EU legislator’s ability in striking compromises between competing citizens’ rights and business’ interests. Especially in a world where cyber and military conflicts have returned at our doors, traditional tools of power have waned in importance (e.g. raw military power, economic sanctions, embargos). Notwithstanding, the type of regulatory power that the EU possesses remains more resilient, more versatile, and less easily undermined by external powers. It is a type of power that reiterates the importance of fundamental rights and Union values, and that puts their protection at the forefront.

¹Anu Bradford, The Brussels Effect, 107 Northwestern University Law Review 1 (2012).

²Anu Bradford, The Brussels Effect: How the European Union Rules the World, (2020). Faculty Books. 232.

³Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Markets Act)

⁴Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market For Digital Services and amending Directive 2000/31/EC (Digital Services Act)

⁵Regulation (EU) 2024/1083 of the European Parliament and of the Council of 11 April 2024 establishing a common framework for media services in the internal market and amending Directive 2010/13/EU (European Media Freedom Act)

⁶Regulation (EU) 2024/900 of the European Parliament and of the Council of 13 March 2024 on the transparency and targeting of political advertising

⁷Eisenstat, Y., Hendrix, J., & Kreiss, D. (2024). Preventing Tech-Fueled Political Violence: What online platforms can do to ensure they do not contribute to election-related violence. The Bulletin of Technology & Public Life. https://doi.org/10.21428/bfcb0bff.eeb0a669

⁸United Nations Development Programme, A ‘super year’ for elections, 2024. Data is available here: https://www.undp.org/super-year-elections

⁹Regulation (EU) 2023/2854 of the European Parliament and of the Council of 13 December 2023 on harmonised rules on fair access to and use of data and amending Regulation (EU) 2017/2394 and Directive (EU) 2020/1828 (Data Act)

¹⁰Regulation (EU) 2022/868 of the European Parliament and of the Council of 30 May 2022 on European data governance and amending Regulation (EU) 2018/1724 (Data Governance Act)

¹¹Regulation (EU) 2024/1689 of the European Parliament and of the Council of 13 June 2024 laying down harmonised rules on artificial intelligence and amending Regulations (EC) No 300/2008, (EU) No 167/2013, (EU) No 168/2013, (EU) 2018/858, (EU) 2018/1139 and (EU) 2019/2144 and Directives 2014/90/EU, (EU) 2016/797 and (EU) 2020/1828 (Artificial Intelligence Act)

¹²Read the full text here: https://www.whitehouse.gov/briefing-room/presidential-actions/2023/10/30/executive-order-on-the-safe-secure-and-trustworthy-development-and-use-of-artificial-intelligence/

¹³Read the full text here: https://sso.agc.gov.sg/Acts-Supp/38-2022/Published/20221221?DocDate=20221221

¹⁴Read the full text here: https://bills.parliament.uk/bills/3137

¹⁵See e.g. Provisions on the Administration of Algorithmic Recommendations for Internet Information Services – March 2022; Provisions on the Administration of Deep Synthesis of Internet Information Services – January 2023; Interim Measures for the Management of Generative AI Services – August 2023.

¹⁶Anu Bradford, The Brussels Effect, 107 Northwestern University Law Review 1 (2012).

¹⁷Article 34(1) lit. b) Digital Service Act.

¹⁸Article 27 AI Act.