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European companies risk “devastating” retaliation from Washington if Brussels continues with plans to restrict access to parts of the European market for US rivals such as Elon Musk’s SpaceX, the US ambassador to the EU has warned.
Andrew Puzder’s warning comes after the European Commission proposed this year to reserve for European players part of its frequency band allowing smartphones to connect directly to satellites. This would limit the frequencies of Chinese and American companies like SpaceX, which operates the Starlink satellite network.
Asked whether European companies should fear retaliation, Puzder told the FT that they “should be wary that this could happen and it would be very devastating for these companies”, given the size of the US market.
The proposed changes to the bloc’s spectrum allocation have already drawn sharp criticism from SpaceX, which has warned the move risks harming connectivity in Ukraine, where its Starlink service has been critical to civil and military communications since Russia’s full-scale invasion.
The proposed changes are part of a broader initiative to strengthen Europe’s technological sovereignty.
European policymakers are seeking to reduce their reliance on U.S. technology, amid concerns about U.S. President Donald Trump’s unpredictability and the risk of relying on foreign companies for critical infrastructure.
The European Commission has introduced a law on cloud and AI development that would impose sovereignty requirements on providers of sensitive cloud services, while seeking to help European technology companies grow and offer alternatives to American technology companies.
Puzder said he recognized Europe’s right to protect sensitive government information, but warned against using the legislation to favor domestic companies over U.S. competitors.
“If the goal is to make the United States less competitive, I think that’s not a legitimate goal of this type of legislation,” Puzder said. “We do not make European companies more competitive by making American companies less competitive.
“We have the best products in this area. They are reliable products, they are trusted products. We don’t need some kind of synchronized mediocrity.”
The ambassador also questioned whether the EU’s enforcement of its Digital Markets Act, which aims to limit the power of the world’s biggest tech companies, was really aimed at improving competition or rather generating revenue for the EU budget, given the multibillion-euro fines levied against U.S. companies.
“You start to wonder: Are we trying to compete in the digital market or are we trying to generate revenue from American companies for the benefit of Europe??”
Puzder argued that Europe’s ambitions to strengthen its own technology industry risk being undermined by its regulatory approach and by discouraging investment from U.S. companies, as U.S. technology companies grow increasingly frustrated by EU regulatory restrictions and fines.
Instead of seeking to curb the dominance of American companies, Brussels and Washington should join forces to compete with China in the race to develop AI, Puzder said, echoing Trump’s comments that “the worst thing that can happen is we lose this race to China.”
The ambassador urged Europe “to abandon this regulatory mentality that they are going to try to stop things because we are in a race with China” – both on AI and quantum computing.
He said the United States has the ingredients to win this race, “but it would be a lot easier if we worked with Europe instead of fighting Europe.”
The Commission said the proposal “encourages market entry and diversification of EU suppliers, while remaining open to non-EU operators.”
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