US threatens Europe over Starlink restrictions

European companies face “devastating” retaliation from Washington if Brussels presses ahead with plans to restrict American rivals such as Elon Musk’s SpaceX from parts of the European market, the US ambassador to the EU has warned.

Andrew Puzder’s warning comes after the European Commission this year proposed reserving part of its spectrum band that allows smartphones to connect directly to satellites for European players. That would limit the frequencies for Chinese and US companies such as SpaceX, which operates the Starlink satellite network.

Asked whether European companies should fear retaliation, Puzder told the FT that they “should be wary that it could happen and it would be very devastating for those companies”, given the size of the American market.

The proposed changes to the bloc’s spectrum allocation have already raised fierce criticism from SpaceX, which has warned the move risks poorer connectivity in Ukraine where its Starlink service has been critical to civilian and military communications since Russia’s full-scale invasion.

The proposed changes are part of a broader push to strengthen Europe’s technological sovereignty.

European policymakers are seeking to reduce their dependence on American technology amid concerns about the unpredictability of US President Donald Trump and the risk of relying on foreign companies for critical infrastructure.

The European Commission has introduced a Cloud and AI Development Act that would impose sovereignty requirements on providers of sensitive cloud services, while seeking to help European technology companies to scale up and provide alternatives to US tech companies.

Puzder said he recognised Europe’s right to protect sensitive government information but warned against using legislation to favour domestic companies at the expense of American competitors.

“If the purpose is to make United States less competitive, I think that that’s not a legitimate goal of this kind of legislation,” Puzder said. “You don’t make European companies more competitive by making US companies less competitive.

“We have best-in-class products in this area. They’re reliable products, they’re trusted products. We don’t need some kind of synchronised mediocrity.”

The ambassador also questioned whether the EU’s enforcement of its Digital Markets Act, which seeks to curb the power of the world’s largest technology companies, was really aimed at improving competition or more at generating revenue for the European budget, given the multibillion-euro fines on American companies.

“You start to wonder, are we trying to deal with the competition in the digital marketplace or are we trying to generate revenue from American companies to benefit Europe?”

Puzder argued Europe’s ambitions to strengthen its own tech industry risked being undermined by its regulatory approach and by discouraging investment from the American companies, as US tech companies are growing increasingly frustrated by the EU’s 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 comments from Trump that “the worst thing that could happen is that we lose this race to China”.

The ambassador urged Europe “to let go of this regulatory mindset where they’re going to try and stop things because we’re in a race with China” — both on AI and on quantum computing.

He said the US has the ingredients to win that race “but it’d be a lot easier if we were working with Europe instead of fighting Europe”.

The Commission said the proposal “incentivises the entry into the market and diversification of EU suppliers, while remaining open to non-EU operators”.