The expression “the Brussels effect” is often used rather loosely to refer to any or all of the ways by which EU legislative standards come to be adopted in the practices of companies (or governments) in countries outside the EU (“third party countries”). These include both those required by law (de jure) and those adopted for other reasons (de facto), distinctions sometimes recognised.(1)

It is essential to distinguish four distinct “Brussels effects”:

1. Extra-territorial application: Some EU legislation, such as the GDPR, has explicit extra-territorial application, in that it applies to companies or individuals located outside the EU, imposing obligations and potential penalties on them for actions which have effects within the EU. This is a de jure extension of EU sovereignty. The EU AI Act includes two such provisions, as discussed in my previous article on the Act.(2)
2. Legislative emulation by third countries: The emulation of the EU AI Act to a significant extent by legislatures in other jurisdictions(3) (such as Chile, discussed below) is another de jure “Brussels effect”. The adoption of significant parts of the EU’s General Data Protection Regulation (GDPR) by third party legislatures is regarded as one of the most significant forms of the Brussels effect, but it is not because of Bradford’s de facto Brussels effect but rather its de jure adoption.
3. De facto corporate adoption: “The Brussels effect”, writes Anu Bradford “refers to the EU’s unilateral power to regulate global markets”.(4) “The EU does not need to impose its standards coercively on anyone – market forces alone are often sufficient to convert the EU standard into the global standard as companies voluntarily extend the EU’s rule to govern their global operations” (for example, Anthropic, discussed below).(5) This de facto extension of EU sovereignty is Bradford’s principal and innovative usage of the expression “Brussels effect” (which she coined), although she often discusses what I refer to as its three de jure dimensions.
4. Adoption in international agreements and standards: Finally, we must consider the EU’s ability to have its standards included in international agreements (such as the Council of Europe’s development of a global Convention on the regulation of AI, or the OECD’s AI Principles, both discussed below). When these international agreements are implemented in the legislation of third countries, such legislation can be seen as another de jure Brussels effect, but one which occurs at one remove from the EU’s legislation. Similarly, if the EU can have its AI policies included in international technical standards (such as ISO standards), this will often be followed in national technical standards.