How the ‘Brussels Effect’ Helps the EU Rule the World

Where Europe leads, others follow -- at least when it comes to the rules of commerce. Why? Because the alternative could be too costly. Companies selling into multiple markets want a one-size-fits-all approach to regulation and products, perhaps even more so in a world grappling with the Coronavirus, and that is effectively giving the European Union an edge in setting standards far beyond its borders. Even Brexit-bound Britain and trailblazing California are feeling the Brussels Effect.

It’s a term for the influence the EU exerts by shaping rules and technical standards adopted by companies and countries around the world. When YouTube pulls a video rant off its website, it’s using the EU’s definition of hate speech. Timber chopped down in Indonesia, honey harvested in Brazil and the amount of chemicals in Japanese toys all abide by rules set by Brussels. EU antitrust probes into Google’s business are mimicked by India, South Korea and even the U.S. The list goes on.