A warning from Washington
The United States has warned European companies that they could face retaliation if the European Union restricts access to its market for American rivals. Andrew Puzder, the US ambassador to the EU, made the remarks to the Financial Times, which reported them on Sunday, 18 October. Asked whether European firms should fear retaliation, he pointed to the size of the American market and said the consequences could be 'devastating' for those companies. He did not say what the countermeasures would be. The threat is tied to a plan to limit spectrum access for non-EU companies such as Elon Musk's SpaceX.
The spectrum plan
The European Commission has proposed reserving part of the radio spectrum that allows smartphones to connect directly to satellites for European players. Under the proposal, frequencies available to Chinese and US companies would shrink, and SpaceX, which operates the Starlink satellite network, is among those affected. The plan is part of a wider push to strengthen Europe's technological sovereignty and reduce its reliance on American technology. European policymakers cite concerns about the unpredictability of US President Donald Trump and the risk of depending on foreign firms for critical infrastructure. A linked Cloud and AI Development Act would impose sovereignty requirements on providers of sensitive cloud services. Commission officials argue that the package encourages diversification among EU suppliers and new entrants while staying open to providers from outside the bloc.
Starlink and the war in Ukraine
SpaceX has already criticised the plans sharply, warning that they could worsen connectivity in Ukraine. Starlink has been critical to civilian and military communications there since Russia's full-scale invasion in February 2022. Ukrainian forces use the military arm of the Starlink network to communicate and to steer drones in the war against Russia. NOS reports, citing sources it attributes to Reuters, that the White House instructed SpaceX to limit drone speeds, reportedly capping them at 160 km/h instead of top speeds of up to 500 km/h. The Ukrainian army had reportedly run into problems with Starlink in the days before that report. The chart below shows the reported figures.
- Reported new cap
- 160 km/h
- Reported previous top speed, up to
- 500 km/h
Data from the article text
Puzder's objections to the rules
Puzder argued that European firms would not become more competitive by weakening American companies. He said that Europe's right to protect sensitive government information was recognised, but that using legislation to favour domestic companies at the expense of US rivals was not a legitimate goal. Puzder also questioned whether the EU's enforcement of its Digital Markets Act, including its large fines on US tech companies, really serves competition or should mainly bring revenue to Europe. He called for Brussels and Washington to cooperate in competing with China in artificial intelligence. In the FT interview he put his position in one sentence:
“You don't make European companies more competitive by making US companies less competitive.”
Washington's defence of US products
Puzder defended American products as reliable and trusted, and he argued that the EU's approach would produce a weaker market. He said that the US has best-in-class products in this area and that Europe should not accept a narrower choice for its firms. He made clear that the threat of retaliation remained open, while still not specifying any measures. His closing remark in the FT interview was:
“We don't need some kind of synchronised mediocrity.”