Brussels effect
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The “Brussels effect” is the process of unilateral regulatory globalization caused by the European Union de facto (but not de jure) externalizing its laws outside its borders through market mechanisms.
Cause
The combination of market size and relatively stringent standards of the EU can have the effect that firms trading internationally find that it is not legally or technically feasible, or economically viable, to maintain different standards in non-EU markets. Foreign companies exporting globally can find that it is beneficial to adopt standards set in Brussels uniformly throughout their business.[1]
Name
The term Brussels effect was coined in 2012 by Professor Anu Bradford of Columbia Law School[2] and named after the similar California effect that can be seen within the United States.[3]
Race to the top and race to the bottom
The California effect and the Brussels effect are a form of ‘race to the top’ where the most stringent standard has an appeal to companies operating across multiple regulatory environments as it makes global exports easier.[4] The effects are the opposite of the ‘Delaware effect’, a 'race to the bottom' where a jurisdiction can purposely choose to lower its regulatory requirement in an attempt to attract businesses. [5]
Examples
US based multinational Dow Chemical announced in 2006 it would comply with the EU's Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulation for the production and use of chemical substances across its global operation.[6] [7]
Facebook announced in April 2018 that it would implement parts of the EU's General Data Protection Regulation (GDPR) globally. [8][9]
References
- ^ The Brussels Effect: The Rise of a Regulatory Superstate in Europe. Columbia Law School http://www.law.columbia.edu/media_inquiries/news_events/2013/january2013/brussels-effect
- ^ Bradford, Anu (2012) The Brussels Effect. Northwestern University Law Review, Vol. 107, No. 1, 2012; Columbia Law and Economics Working Paper No. 533. SSRN: https://ssrn.com/abstract=2770634
- ^ How State Competition for Corporate Charters Has Changed the Delaware Effect http://clsbluesky.law.columbia.edu/2017/10/16/how-state-competition-for-corporate-charters-has-changed-the-delaware-effect/
- ^ Financial Times - Why the whole world feels the ‘Brussels effect’ November 2017 https://www.ft.com/content/7059dbf8-a82a-11e7-ab66-21cc87a2edde
- ^ How State Competition for Corporate Charters Has Changed the Delaware Effect http://clsbluesky.law.columbia.edu/2017/10/16/how-state-competition-for-corporate-charters-has-changed-the-delaware-effect/
- ^ Dow and REACH - Protecting human health and the environment https://reach.dow.com
- ^ Reach External FAQs https://consumer.dow.com/en-us/technical-support/ehs-portal/reach-external-faqs.html
- ^ Facebook's commitment to data protection and privacy in compliance with the GDPR https://www.facebook.com/business/news/facebooks-commitment-to-data-protection-and-privacy-in-compliance-with-the-gdpr
- ^ Complying With New Privacy Laws and Offering New Privacy Protections to Everyone, No Matter Where You Live https://newsroom.fb.com/news/2018/04/new-privacy-protections/
| This article, Brussels effect, has recently been created via the Articles for creation process. Please check to see if the reviewer has accidentally left this template after accepting the draft and take appropriate action as necessary.
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