US threatens EU with ‘devastating’ retaliation over Starlink restrictions

The bloc has proposed reserving satellite spectrum for local firms, potentially limiting access for foreign players such as Elon Musk’s firm

The US has warned of severe consequences for EU businesses if Brussels goes ahead with plans to restrict American firms such as Elon Musk’s Starlink from accessing satellite spectrum in the bloc.

The warning, issued by US Ambassador to the EU Andrew Puzder, comes after the European Commission proposed earlier this year to reserve a share of the spectrum used for direct smartphone-to-satellite connections for EU market players beyond 2027, when current licenses expire.

The move could limit access to satellite frequencies for foreign providers as part of Brussels’ stated push for technological sovereignty.

“If the purpose is to make US less competitive, I think that that’s not a legitimate goal of this kind of legislation,” Puzder said in an interview with the Financial Times published on Monday. “You don’t make European companies more competitive by making US companies less competitive.”

The envoy stressed that EU businesses “should be wary” that US retaliation “would be very devastating” for them, given the size of the American market.

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Proposed in May, the EU measure envisages allocating part of the harmonized 2 GHz band for government services and the remainder for commercial use, with access regulated to favor European operators. The EC has said the plan would encourage market entry and diversification among EU suppliers while remaining open to non-EU operators.

Politico reported earlier this month that European telecoms groups Deutsche Telekom, Orange, Vodafone, and Telefonica have begun discussing an alliance to jointly bid for the frequencies and to “squeeze” Starlink out of the direct-to-smartphone satellite connectivity market.

In June, SpaceX, which operates the Starlink satellite internet network, criticized the proposal, claiming it could degrade connectivity in Ukraine, which uses the service to carry out drone strikes deep inside Russia. Earlier this month, Kiev stated that access to the service had been restricted as US President Donald Trump continued to step up pressure on Vladimir Zelensky to halt attacks on Russian oil refineries.

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Beyond the spectrum proposal, Brussels has also put forward a Cloud and AI Development Act that would introduce digital sovereignty requirements for cloud service providers. The previously adopted Digital Services Act (DSA) and Digital Markets Act (DMA) allow Brussels to impose hefty fines on major tech companies, including Google, Apple, and Meta, for anti-competitive practices and violations of online content rules.

The laws have drawn criticism from the US, which has also condemned the European Commission’s €120 million ($136.51 million) fine against Elon Musk’s X platform for alleged violations of the DSA.

In his FT interview, Puzder questioned whether Brussels is seeking to promote competition or generate revenue for the EU budget through multibillion-euro fines on US tech companies. The envoy also told the newspaper that the bloc’s ambitions to strengthen its tech industry risk being undermined by regulations that discourage US investment and fuel frustration among American tech firms.