Harper Bischoff, JLST Staffer
The European Union’s proposed Space Act has emerged as an early indicator of how the United States and Europe will approach the regulation of commercial space activity.[1] In public statements, the U.S. has expressed “deep concern” that the Act would create barriers for major American satellite operators and place a disproportionate burden on companies that deploy large constellations.[2] Several of the Act’s requirements would apply to any operator whose services reach users in Europe, even when the operator has no physical presence there.[3] As a result, American companies that dominate the market for large satellite networks, especially SpaceX and Amazon, would face new obligations that do not affect most existing European systems.[4] The Space Act represents a major shift in how commercial space activities are regulated, and the response by the U.S. and major corporate players will set the tone for a new era of regulation.
This growing divide places pressure on an international legal system that was not designed for today’s commercial environment.[5] The primary treaty governing space activities, the Outer Space Treaty (“OST”), was drafted in 1967 when only states launched satellites.[6] Its provisions focus on broad principles such as freedom of access, avoidance of harmful contamination, and state responsibility for national space activities.[7] The Liability Convention of 1972 expands on these duties, but it was also written for a world in which governments controlled nearly all space operations and private activity was rare.[8]
Contemporary space commerce looks nothing like that world. Modern operators manage thousands of satellites, engage in continuous launches, and pursue new activities such as commercial space stations, in-orbit servicing, resource extraction, and space tourism.[9] These developments expose the blatant gaps in the current treaty system. Concepts such as “damage” and “fault” lack detailed definitions for modern satellite operations, and the existing treaties contain no clear dispute resolution process for conflicts involving private companies.[10] The rapid growth of commercial activity has therefore outpaced the international rules that govern it, leaving states and operators to manage risks through national or regional regulation.[11]
The European Commission introduced the draft Act in June as a response to longstanding problems in European space regulation.[12] Today, satellite operators must contend with a fragmented set of national requirements for licensing, debris mitigation, and cybersecurity.[13] The Commission describes the new proposed legislation as an effort to promote “safety, resilience, and sustainability” across the European market by replacing this patchwork system with one coherent set of rules.[14] The goal is to establish consistent standards for operators that already view Europe as a unified market for broadband, navigation, and Earth observation services.[15]
Much of the United States’ concern centers on the Act’s treatment of what the Commission calls giga constellations.[16] These are systems with more than one thousand satellites, a category that the current market fills almost entirely with American operators.[17] Starlink has more than eight thousand active satellites and plans for far more, while Amazon’s Project Kuiper expects to deploy a constellation of several thousand satellites.[18] European constellations are far smaller.[19] The U.S. argues that the Act’s rules would therefore have a “selective effect” and risk limiting the competitiveness of American companies in Europe.[20]
Europe’s motivation is different. While the U.S. views these provisions as disproportionately burdensome, Europe approaches the issue from a different perspective. The Space Act is part of a broader effort to establish clear rules in sectors that are crucial to economic and strategic policy.[21] Recent European concerns about geopolitical uncertainty, including debates over U.S. security commitments and trade policy, have encouraged the Commission to strengthen European capabilities and reduce reliance on non-European providers.[22] In that context, the Space Act is both a regulatory project and a strategic one.
The draft Act introduces several requirements that drive this reaction. For instance, constellations with ten or more satellites must have propulsion or similar maneuvering capabilities that allow active collision avoidance.[23] This requirement reflects European concern about congestion in low Earth orbit.[24] Another concern is that operators planning to launch constellations between ten and ninety-nine satellites may apply for a single consolidated authorization, but only if every satellite is identical and launched under the same mission plan.[25] Modern American systems often rely on varied satellite designs and staggered launches, which makes it unlikely that they could use this streamlined pathway.[26]
The Act also extends to operators outside Europe whose services reach European users. These providers must obtain an EU license and designate a legal representative in Europe, even if the operator does not own the hosting satellite or ground systems.[27] As a result, hosted payloads arrangements and telemetry or tracking services fall within the Act’s reach, which complicates the allocation of compliance obligations between the payload operator and the owner of the satellite.[28]
The United States argues that these provisions create unnecessary barriers to an industry that is still being heavily developed.[29] In its consultation comments, the United States stated that the Act does “not take into account that space operations are still relatively new and novel” and that strict regulation could slow innovation at a time when the private sector is driving much of the growth in satellite technology.[30] American officials also warned that the Act could undermine cooperation within NATO by creating regulatory hurdles for United States commercial firms that currently support allied operations and communications.[31]
The EU Space Act should be understood in light of the preceding information. Europe is attempting to create a regulatory framework for a market that is expanding faster than the international legal system can accommodate.[32] The U.S., in turn, is seeking to protect the innovations of domestic companies from obligations that it views as costly and asymmetrical.[33] Both positions reflect legitimate concerns, yet without coordination, the result may be two divergent regulatory systems that shape how commercial operators design and deploy their satellites.[34]
What is clear is that the Space Act debate reveals a notable shift in the commercial space industry. Space governance is no longer driven exclusively by multilateral treaties. Instead, it is increasingly defined by regional regulatory choices that reflect different priorities for innovation, environmental protection, security, and market access. Whether this leads to cooperation or fragmentation will depend on whether the U.S and the EU can reconcile their approaches as commercial activity continues to expand.
Notes
[1] See Clément Evroux, Commission Proposal for EU Space Act, at 9, Eur. Parliamentary Rsch. Serv., June 25, 2025, https://www.europarl.europa.eu/RegData/etudes/BRIE/2025/775922/EPRS_BRI(2025)775922_EN.pdf (noting that U.S. analysts fear EU space law could set global standards affecting commercial operators; early scrutiny shows divergent regulatory approaches to orbit commercialization).
[2] Sam Clark, US Slams EU’s Proposed Space Law as ‘Unacceptable’, Politico, Nov. 5, 2025, https://www.politico.eu/article/us-slams-eus-proposed-space-law-as-unacceptable/.
[3] The Proposed EU Space Act: 10 Key Implications U.S. and Non-EU Satellite Operators Should Know, Cooley, July 24, 2025, https://www.cooley.com/news/insight/2025/2025-07-24-the-proposed-eu-space-act-10-key-implications-us-and-non-eu-satellite-operators-should-know.
[4] Tomorrow’s Aff. Ed. Bd., Space as a New Regulatory Dividing Line Between the EU and the US, Nov. 13, 2025, https://tomorrowsaffairs.com/space-as-a-new-regulatory-dividing-line-between-the-eu-and-the-us.
[5] See Inesa Kostenko, Current Problems and Challenges in International Space Law: Legal Aspects, 5 Adv. Space L. 48, 53–54 (“Today those founding treaties of Space Law find many issues unaddressed . . . the old rules and customs need their renewal today.”).
[6] Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies, Jan. 27, 1967, 18 U.S.T. 2410 [hereinafter Outer Space Treaty or OST]. See also International Space Law Explained, United Nations, https://www.un.org/en/peace-and-security/international-space-law-explained, (last visited Nov. 16, 2025) (explaining that the OST was written during a period when space activities were exclusively conducted by nation-states, prior to the rise of commercial actors).
[7] See OST, supra note 6, art. IX. & VI. See also Kostenko, supra note 5, at 50 (“Outer space and celestial bodies are free for exploration, and use by all States in conformity with international law and are not subject to national appropriation.”).
[8] Trevor Kehrer, Closing the Liability Loophole: The Liability Convention and the Future of Conflict in Space, 20 Chi. J. Int’l L. 178, 188 (2019), https://cjil.uchicago.edu/print-archive/closing-liability-loophole-liability-convention-and-future-conflict-space (noting that the Convention was designed during a time when states, not private entities, dominated space operations).
[9] See Matthew H. Ormsbee & Harine Raaj, Precise Operations, Imprecise Laws: How Nebulous Laws Wreak Havoc in Outer Space, 20 Wash. J.L. Tech. & Arts 1 (2025) (explaining that “[t]he emergence of space tourism, proposals for asteroid mining, and plans for private space stations further underscore the expanding role of commercial entities in space”).
[10] See id. at 33–34 (describing how the OST and Liability Convention lack clarity on liability apportionment, supervision of private actors, and dispute resolution processes involving commercial space companies).
[11] Id.
v See Evroux, supra note 1, at 2–3 (explaining that the draft Act responds to fragmented national approaches to space law and aims to harmonize regulation across the EU).
vi See generally Ormsbee & Raaj, supra note 9 (noting that national regulations on commercial space activities are inconsistent across licensing, debris mitigation, and operational oversight).
[14] Tomorrow’s Aff. Ed. Bd., supra note 4.
[15] Id.
[16] Id.
[17] Id.
[18] Id.
[19] See Jean-Pierre Diris, IRIS2: Everything You Need to Know About This New European Constellation, Polytechnique Insights, Mar. 11, 2025, https://www.polytechnique-insights.com/en/columns/industry/iris2-everything-you-need-to-know-about-this-new-european-constellation/ (describing IRIS2, the EU’s flagship project that will deploy fewer than 300 satellites compared to Starlink’s tens of thousands and Kuiper’s projected 3,200).
[20] See Tomorrow’s Aff. Ed. Bd., supra note 4 (explaining that the Act’s technical requirements for large constellations apply almost exclusively to U.S. companies, which dominate that segment of the market).
[21] Id.
[22] See id. (citing recent EU efforts to promote “strategic autonomy” amid concern over shifting U.S. security and trade policies). See also Théophane Hartmann, From Iris2 to Starlink: A Taxonomy of Satellite Mega-Constellations, Euractiv, Aug. 26, 2025, https://www.euractiv.com/news/from-iris%C2%B2-to-starlink-a-taxonomy-of-satellite-mega-constellations/ (highlighting that initiatives like Iris2 serve both commercial and strategic purposes, aimed at securing sovereign communications in response to growing geopolitical instability).
[23] Cooley, supra note 3.
[24] See id. (“This obligation is closely linked to the elevated risk of orbital congestion and collision associated with the deployment of multiple, simultaneously operating satellites).
[25] Id.
[26] Jonathan O’Callaghan, What the Amazon versus SpaceX Satellite Mega Constellation War Means for Earth, Sci. Am., Apr. 28, 2025), https://www.scientificamerican.com/article/what-amazons-project-kuiper-vs-spacexs-starlink-satellite-mega-constellation/ (noting that U.S. constellations like Starlink and Kuiper use staggered, iterative deployment strategies, which renders them unlikely to qualify for EU streamlined licensing).
[27] See Cooley, supra note 3.
[28] Id.
[29] See generally Mija Aleksandraviciute et al., Industrial Policy for the Final Frontier: Governing Growth in the Emerging Space Economy, Brookings, Sept. 23, 2025, https://www.brookings.edu/articles/industrial-policy-for-the-final-frontier-governing-growth-in-the-emerging-space-economy/ (noting that the space economy remains in a formative stage, where unclear rules and premature regulation may impede innovation and undercut system-wide risk management).
[30] See Clark, supra note 2.
[31] See Theresa Hitchens, US Slams ‘Discriminatory’ Draft EU Space Law as Imperiling NATO Cooperation, Breaking Defense, Nov. 5, 2025, https://breakingdefense.com/2025/11/us-slams-discriminatory-draft-eu-space-law-as-imperiling-nato-cooperation/ (cautioning that the proposed regulation could obstruct NATO-aligned coordination by subjecting U.S. space providers to burdensome and discriminatory entry requirements).
[32] Cooley, supra note 3.
[33] See Douglas Gorman, US Echoes European Concerns on the EU Space Act, Payload, Nov. 7, 2025, https://payloadspace.com/us-echoes-european-concerns-on-the-eu-space-act/ (criticizing the EU Space Act for imposing “prohibitive costs” on startups and small companies that “drive innovation in space”).
[34] See Tomorrow’s Aff. Ed. Bd., supra note 4 (noting that both the EU and U.S. see the Space Act as serving critical interests, but are at odds over its extraterritorial effects and potential market consequences).