EU's "Space Act" Targets Starlink's Hegemony: Will the Space Version of GDPR Extend the "Brussels Effect" to Outer Space?

On June 25, 2025, the European Commission announced a proposal for a European Union (EU) "Space Act," which is the first attempt to regulate the space economy at the supranational level. This initiative by the European Commission is based on the Draghi Report in 2024. The report emphasizes that space is crucial for providing basic services to citizens and ensuring the security of the EU, and calls for action to address the issues that undermine the EU's competitiveness in the space industry: insufficient funding, market fragmentation, external dependence, and inefficient governance arrangements.

Importantly, the act also applies to third - country operators and international organizations providing space services within the Union. As the EU increasingly realizes that its domestic satellite industry is vital for its connectivity, defense, and sovereignty goals, the dominant position of Elon Musk's Starlink network in this field has become an obvious weakness for Europe, highlighting the danger of relying on a single foreign participant.

The proposal is quite ambitious, setting unified technical rules for certain aspects of space activities, namely safety (including the tracking of space objects), cybersecurity, and environmental sustainability. Other aspects of the space economy, such as the liability of space operators or the use of space resources, are not covered.

The EU "Space Act" represents a paradigm shift in the European and even global space industry, setting new standardized criteria for safety, resilience, and sustainability. Its regulatory design largely draws on the experience of the "General Data Protection Regulation" (GDPR) and other legislation related to the digital economy. Notably, the proposed regulation widely covers non - EU operators providing space services in the EU, indicating the EU's attempt to exert influence globally, just as the EU legislature has done in the fields of data protection and artificial intelligence.

I. From Space Policy to the Single Market

Launching and operating satellites are inherently high - risk activities that need to be regulated, especially as satellite orbits become crowded and issues such as space traffic management and debris pollution become more prominent. Currently, about half of the EU member states have enacted laws to regulate the space sector. On June 24, 2025, the day before the European Commission proposed the EU "Space Act" proposal, Italy announced its law on the space economy.

However, the laws of member states vary significantly in terms of scope, regulatory design, and substantive rules. For example, Sweden's "Space Activities Act" enacted in 1982 requires a license for space activities, but it does not specify the criteria for granting the license, nor does it stipulate the technical requirements that space operators should comply with. In contrast, the legislation in France and Italy is more detailed and comprehensive. The differences between national laws hinder cross - border cooperation, which is the norm in the space industry. This increases the costs for enterprises and may inhibit the development of the space economy. On the other hand, the lack of common standards for safety and environmental sustainability may lead to regulatory competition among member states and a decline in the regulatory level.

The legal basis chosen for the EU "Space Act" will have an impact on the regulatory technology and the content of the proposed legislation. The proposal conforms to the trend of "act - making" in EU law, which emerged in the European Commission's 2019 - 2024 priority plan and is particularly prominent in the context of the Digital Single Market. This includes the "Data Governance Act," the "Digital Services Act" (DSA), the "Digital Markets Act" (DMA), the "Data Act," and the "Artificial Intelligence Act." Their precursor is often considered to be the GDPR.

Act - making means achieving harmonization through regulations rather than directives. The main advantage is that regulations can be directly applicable without implementation in national laws: this saves time and allows for a greater degree of uniformity. However, EU "acts" often do not establish a fully detailed regulatory framework and may require a certain degree of domestic legislative implementation, partly similar to directives. Since regulations compress the autonomy of member states more than directives, there needs to be a certain justification for choosing regulations to partially harmonize the rules of the space economy. In the explanatory memorandum, the Commission points out the benefits that regulations will bring in terms of consistency and the unified protection of the rights of space service operators, as well as the usual arguments regarding the principles of subsidiarity and proportionality.

The logic of the single market on which the proposal is based is also evident in its content, as some of the key provisions incorporate concepts and principles commonly found in EU market - harmonizing legislative tools. Article 3 contains a free - movement clause, prohibiting member states from restricting the provision of space data and space services on the grounds of imposing stricter standards for safety, resilience, and environmental sustainability, unless it is objectively necessary for legitimate reasons. Another common tool for market integration is the principle of mutual recognition, which applies to national authorizations for space activities. Paragraph 2 of Article 6 requires member states to recognize authorizations issued by another member state in cases involving harmonized technical requirements.

II. Sending the Brussels Effect into Orbit

One common feature with several pieces of legislation related to the Digital Single Market is that the EU "Space Act" defines a relatively broad scope of personal application. The proposed regulation applies not only to space service providers established within the EU but also to providers established in third countries that provide space - based data or space services to the EU. Therefore, the regulation can be applied based on territorial connection (place of establishment) or based on the provision of services within the EU single market (market model).

As in the case of regulating digital technologies, using market criteria to define the scope of application of the expected "Space Act" may have a dual effect. On the one hand, it aims to ensure a fair competitive environment and prevent operators established in third countries from taking advantage of potentially more lenient legal systems in terms of safety, cybersecurity, or environmental sustainability. On the other hand, this approach also indicates the EU's desire to set global standards and prompt space operators to comply with its regulations, unless they are willing to give up the ability to provide services in the European market.

This practice of extending regulatory power globally is called the "Brussels Effect." The practical impact may prompt enterprises to voluntarily comply with the regulations, because the cost of separating products and services for the EU single market from those for foreign markets is higher than the cost of complying with global EU standards. At the legal level, third countries will follow the lead of the EU and draw inspiration from EU law to design their own legal systems. The EU institutions intend to promote the "Brussels Effect," especially in the fields of data protection and artificial intelligence regulation. They point out in the explanatory memorandum that the proposed unified standards will "make the EU a global standard - setter" and provide "an opportunity for the EU to lead in setting global standards."

The EU's regulation of the digital economy has led to frictions with third countries (especially the United States) regarding data protection rules and the obligations of technology giants. To reduce the risk of regulatory conflicts, the "Space Act" proposal combines the requirement for non - EU operators to comply with EU rules with a system of recognition of third - country laws. This provision is clearly inspired by the GDPR.

III. A Robust Enforcement Mechanism

According to the proposal of the EU "Space Act," space operators need to obtain authorization to carry out space activities and be registered in the EU Register of Space Objects (URSO). However, different legal systems will apply in part to operators established within the EU and those established in third countries. Member states will be responsible for approving and supervising space operators established within the EU.

To this end, each member state must designate a competent national authority. These are similar to the national regulatory authorities under the GDPR. Like the GDPR, the EU "Space Act" proposal details the tasks and powers of national regulators. If the proposal is adopted in its current form, national authorities will have extensive powers of investigation, correction, and sanction. In terms of sanctions, the proposal leaves the introduction of "effective, proportionate, and dissuasive" penalties to member states, but provides criteria for determining these penalties and requires national authorities to have the power to take space operators to court.

Perhaps because of the awareness of the many deficiencies in the GDPR enforcement system, where the powers of national competent authorities in handling cross - border cases often lead to delays and disagreements among regulatory authorities, when drafting the "Space Act" proposal, the European Commission attempts to centralize the regulation of third - country operators at the supranational level, similar to what the EU legislature has done in the "Digital Services Act" and the "Digital Markets Act." The European Commission itself, with the support of the European Union Agency for the Space Programme (EUSPA), will be responsible for overseeing non - EU operators' compliance with the requirements stipulated in the proposed regulation. The Commission has the power to impose fines on violators equivalent to twice the profit they have obtained from the violation, or 2% of the company's total annual turnover if the specific amount cannot be determined.

In addition to the Commission, which will gain significant supervision and enforcement powers, the EUSPA is also expected to develop significantly with the adoption of the EU "Space Act." Currently, the core tasks of the EU Space Policy Agency are limited to managing certain aspects of the EU space program, especially those related to safety certification, operational safety, communication, promotion, and market development. According to the EU "Space Act" proposal, it will gain more powers: the EUSPA will provide the Commission with technical expertise for overseeing third - country space operators and share the power of investigation, and will also be responsible for managing the Union Registry of Space Objects (URSO) and issuing electronic certificates proving that space objects meet the requirements stipulated in the regulation. In addition, when granting authorizations to EU space operators, member states can choose to delegate the necessary technical compliance assessment work to the EUSPA.

Conclusion

When formulating the EU "Space Act" proposal, the experience of regulating digital technologies clearly inspired the Commission. Its enforcement mechanism is particularly similar to that of the GDPR, and the scope of the proposal and the regulatory system for third - country operators show its goal of exerting global regulatory influence. However, if the major space - faring countries and the largest private operators in the global space economy do not align with EU standards, the Brussels Effect may fail, and the European space industry may lose its competitiveness.

These concerns will play an important role in the legislative process, which is expected to be long and complex. Even if the proposal can be adopted relatively quickly, the implementation of the EU "Space Act" will not bring about changes overnight, as the European Commission expects it to come into force after 2030 to allow relevant industries time to adapt to the new technical rules.

If the basic framework of the EU "Space Act" can be retained after intense lobbying and political compromises, the EU is expected to become the main regulatory body for the space economy, just as it has done in the field of digital technologies.

This article is from the WeChat official account "Internet Law Review". Author: Alberto Miglio. Republished by 36Kr with permission.