Globalisation of the Regulatory Power of the European Union

Globalisation of the Regulatory Power of the European Union

Nuno Cunha Rodrigues

This book is part of my PhD obligations considering it relates to the analysis of how the EU regulatory power is being built up globally. In other words, the extraterritorial dimension of the EU Law in respect to its connections with International Law components.

To Compliance Officers, it is always complex to explain why certain operations or business choices could not be performed in the EU territory. The author gives good examples of how the economic power of the EU market can be a push to the implementation of certain rules not only inside the EU territory, but cometimes beyond it if certain connective requirements are in place. 

The most important thing is that this is not exclusive in the EU, the author helps recall it by mentioning certain USA examples (FCPA, FEPA, Sarbanes-Oxley, etc) in which extraterritoriality is in cause and were object of long discussions in international tribunals due to its penalties regime. 

My best quote for this book is:

“(...) in contrast with the USA model oriented to the market, which emphasizes governments understand the technology and must refrain from regulating it, the EU is more concerned about how companies don’t understand what the technology implies to the fundamental rights of people and democratic institutions which are usually harmed by those services. The EU message is clear: it will apply rules to the social economy in the digital environment, so, the regulators are going to establish rules not the big techs”. 

This book is specially relevant to understand how antitrust and anti competitive behaviour can be an issue in the era of the digital economy. Several judicial precedents and new rules are mentioned to explain and give grounds to the author's main conclusion which is that in opposition to other countries in which the extraterritorial regulatory power comes from military or economic power, in the EU it comes from the idea of Rule of Law and its internal market. 

The exemption of the principle of territoriality is a tool to ensure the EU Law applicability depends on its adoption not only in the EU, sometimes in other markets around the world due to their connective elements. Most importantly is the fact that in the globalisation era and digital economy the EU law must be integrated not only at its internal level (in between EU member states), but it should be able to harmonize global convergence (as we could see in the GDPR case).

My personal takeaway is that the scope expansion of the EU regulatory initiative is growing fast in several examples: EU Whistleblowing Directive and its transposition, Corporate Sustainability Directive, GDPR, and many other examples the author recollects. Here we must highlight the importance of international compliance components of the corporate legal function and its integration with operations and business areas.