The Brussels Effect in AI Regulation

Markets can regulate even without jurisdiction.

The “Brussels Effect” describes how EU regulations become de facto global standards through economic necessity rather than legal mandate. Companies doing business in the EU, or wanting to, align globally to a single compliant standard rather than maintaining separate systems. GDPR demonstrated this pattern: even companies outside the EU adopted GDPR-aligned practices.

The EU AI Act is explicitly positioned to repeat this dynamic. The European Commission established an AI Office partly to consolidate internal regulation but also to support EU foreign policy ambitions in trade negotiations. A specialist “Advisor for International Affairs” position will represent the AI Office in global conversations.

The strategic implication: whoever writes the first comprehensive regulation may shape the global default, regardless of whether that regulation is technically superior or even broadly adopted by other governments.

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