The European Union spent two years drafting a law to protect its space companies from American dominance. The first casualty may be the law itself. And then, if it passes, the people it was supposed to help.
The revised EU Space Act, released by Cyprus — currently holding the EU's rotating presidency — on March 30, drew a rare display of unified opposition at the 41st Space Symposium in Colorado Springs last week. The U.S. State Department, the Commerce Department's Office of Space Commerce, and representatives from Astroscale, SpaceX, and the U.S. Chamber of Commerce all appeared at the same panel. Their verdict on the updated draft was unanimous: worse than the original.
"Unfortunately, this latest version that just came out last month from Cyprus, in our view, moves in a backward direction," said Michael Overby, deputy director of space affairs at the State Department, speaking at the Space Symposium panel.
The bill is shorter, which its drafters presented as a simplification. But brevity without clarity is not progress. "There are a lot of things where it says you need to do X. What counts as X? Who knows," said Gabriel Swiney of the Office of Space Commerce. Compliance, in other words, will be determined not by the text of the law but by whichever European committee gets to it first.
That ambiguity alone would be manageable. The deeper problem is that the draft requires EU regulators to receive technical data from companies seeking to operate in European markets — including data controlled under the U.S. International Traffic in Arms Regulations, or ITAR. ITAR is not a suggestion. It is a federal crime under 22 U.S.C. § 2778 for any U.S. person to transfer defense-related technical data to foreign nationals without a license. The EU's information requests do not come with an ITAR exemption. Complying with the Space Act would mean violating it.
"This is not a vague law that companies might accidentally break," said Lesley Jane Smith, president of the International Institute of Space Law. "It is a law that requires conduct that U.S. law explicitly prohibits."
The International Center for Law and Economics, in formal comments to the State and Commerce Departments, called the inspection provisions "a poison pill — a built-in condition that makes lawful compliance by U.S. firms impossible under existing U.S. export control laws, thereby excluding them from the EU market."
Janna Lewis, senior vice president of policy at Astroscale U.S., put it more simply: "It puts us in a bind."
The bind has a price tag. A study released in March by the Computer and Communications Industry Association — a trade group representing U.S. tech and space companies — estimated the Act could cost European GDP up to €52 billion per year as U.S. companies restructure or exit European operations rather than risk criminal exposure. Providers of space-based services face €210 million to €311 million in annual losses, with cumulative costs reaching €2.1 billion by 2030.
The U.S. Chamber of Commerce separately warned the regulation would "inadvertently slow investment and service deployment within Europe and to European customers." SpaceX called for the Act to be "radically simplified" in areas related to space safety.
There are other provisions that should concern anyone who has ever signed a contract they meant to keep confidential. The new draft appears to give EU regulators the ability to review contracts for in-orbit services — arrangements that companies treat as commercially sensitive between the parties. Lewis called provisions like that "impossible" to comply with.
One other asymmetry worth noting: the Act carves out national security space cooperation from its requirements. Civil space cooperation — NASA working with ESA, American companies providing launch services to European civil programs — gets no such protection.
The timing matters. A working group meeting on April 21, featuring EU Commissioner for Defense and Space Andrius Kubilius, is meant to produce a consolidated position before the file moves to the European Parliament. That is ten days from now. The window for substantive change is not open long.
It may not matter anyway. Smith noted that a majority of EU member states have already indicated they believe the regulation exceeds what Brussels has the legal authority to do. "Nobody is content with this draft," she said. "The majority of states do see it as beyond the European Union's competence."
Which raises the possibility that the EU is in the process of legislating itself into a jurisdictional argument it cannot win, while American companies hold their breath, and — somewhere in a European capital — a startup founder who uses U.S.-origin components is just starting to realize what this might mean for their next fundraising round.
The Act is supposed to protect European space. The people most likely to need protecting from it are the ones it was written for.
