A young French web developer we had the pleasure to interview reflects this concern:
“The GDPR was a good start and we have to pursue. As a developer, I’m very careful of where my data goes, that’s why I am mainly using French search engines such as Qwant. People have to be more careful on what they are putting and doing online. If you are working for a big company you can’t just ask the AI to help you with your tasks because this can cause a data leak. Today, CEOs really have to strike a deal with an AI company to guarantee that their data won’t be on the web.”
His perspective highlights a growing awareness that legal control over data and digital activity has become a key instrument of global power, one the U.S. wields effectively through extraterritorial law.
When lawfare becomes a weapon of economic warfare
U.S. extraterritorial laws apply worldwide whenever a foreign company comes into contact with the United States. The reasons of the conflict include: conducting transactions in dollars, exchanging emails through U.S.-based systems, hosting data on servers located in the United States, operating a subsidiary there, or being listed on an American financial market. At the heart of this framework lies the Foreign Corrupt Practices Act (FCPA). It is enforced jointly by the Department of Justice (DOJ) for criminal sanctions and the Securities and Exchange Commission (SEC) for civil and administrative penalties.
Enacted in 1977, the FCPA aims to prevent and prosecute international corruption. It is supported by other institutions such as the Office of Foreign Assets Control (OFAC). The OFAC plays a central role in issuing, managing, and enforcing economic sanctions. As the issuer and guardian of the world’s primary currency, the U.S. leverages its control over the dollar to oversee and secure global financial networks, and, by extension, international trade.
When Compliance Becomes Power: The FCPA and America’s Grip on Europe
The United States has already struck major blows against companies such as BNP Paribas and Airbus. However, this analysis will focus on the Alstom affair. It became a highly debated topic during the 2022 presidential election in France.
In 2013, Frédéric Pierucci, a senior executive at Alstom, was arrested by the FBI. He was then jailed upon his arrival at New York’s J.F. Kennedy Airport. The conflict began when the Department of Justice (DOJ) sought information from Alstom. He immediately refused to provide anything. Interpreting this refusal as non-cooperation, U.S. prosecutors decided to target the company’s top executives. Pierucci was subsequently detained for 14 months in a high-security U.S. prison.
Under mounting pressure and fearing further consequences, Alstom ultimately chose to plead guilty. As a result, it was hit with a $772 million fine. By 2014, the company was on the brink of bankruptcy. To prevent Alstom from being forced to sell its energy division, which represented 70% of the group’s activities, to General Electric (GE) for roughly €12 billion, the Minister for Industrial Renewal, Arnaud Montebourg, implemented safeguard measures. As Minister of the Economy at the time, he issued a decree requiring government approval for strategic sales. Noting several conflicts of interest surrounding the deal, he managed to delay the transaction by two months.
Conflicts of interest
During the Alstom deal, several figures close to French political leadership were reportedly linked to General Electric. A communications strategist near Manuel Valls is said to have managed GE’s communications, while Hugh Bailey, an adviser at the Ministry of the Economy, joined GE during the transaction and later became its head of public affairs. Alstom was also advised by a law firm whose CEO was the brother of GE’s executive leader. This raised potential conflict-of-interest concerns.
Arnaud Montebourg proposed alternatives to the sale of Alstom’s energy division, including a partnership with Siemens and Mitsubishi or a controlled GE takeover. Emmanuel Macron, then Minister of the Economy, and President François Hollande favored the acquisition. They thought is would ease long-standing tensions with the Communist Party, Bouygues, and TF1. Montebourg opposed the deal, even suggesting a temporary nationalization, which Macron rejected.
Before leaving office, Montebourg negotiated for Bouygues to lend the state its 20% stake in Alstom. There was an option to purchase by 2017, but this safeguard was never activated. Ultimately, CEO Patrick Kron approved the sale of the entire energy division, including nuclear assets, to GE. The agreement required the Americans to create 10,000 jobs, maintain decision-making centers in France, and share financing. However, only the last condition was met. France did not recover the Bouygues shares, reportedly giving the group €350 million.
Observers argue that U.S. involvement in this strategic matter weakened France’s negotiating position. Fearing financial and legal consequences, the country accepted terms that critics say undermined its energy sovereignty, leaving key nuclear operations under foreign control. Some opponents also claim that Macron’s support of the sale and subsequent financial advantages to Alstom benefited his political career, though these remain politically contested and not proven.
Trump gives the US an advantage over global competition
According to recent reports, Donald Trump signed an Executive Order on February 10, 2025. For a period of six months, U.S. companies are expected to operate with significantly fewer constraints. Indeed, the President has temporarily suspended the application of this act for American firms. This decision effectively allows U.S. companies to act with far greater freedom while the measure is in force.
Experts’ opinions
According to Véronique Chabourine, a soft power analyst, the European Union must protect itself against US extraterritorial laws:
“Only a balance between soft power and hard power will enable it to preserve its influence and secure its interests.”
In March 2025, numerous French companies reportedly received a letter from the U.S. embassy. It stated that they must now comply with Presidential Executive Order 14173 on diversity or risk exclusion from federal public procurement contracts.
“The extraterritoriality of the law has become an increasingly accepted lever of American legal sharp power: an offensive use of the law to coerce, weaken, or align other powers. In a world where competition also takes place in the regulatory arena, this instrumentalization of the law redefines the balance of power.”
Véronique Chabourine
She argues that the United States has turned the law into a strategic instrument through the Foreign Corrupt Practices Act (FCPA), economic sanctions, and export controls. This trend, she adds, is visible in the growing number of sanctions imposed on foreign companies via the FCPA, the Entity List, and various export-control mechanisms. Under Donald Trump, 164 FCPA actions were launched. It is an unprecedented figure, compared to 126 under Barack Obama and 96 under Joe Biden. According to these assessments, legal pressure has increasingly become a tool for gaining advantage in the economic arena.
In response, several countries have developed their own legal defense mechanisms to counter U.S. extraterritorial measures:
- China has enacted an Anti-Foreign Sanctions Law, an export-control regime, and a list of “unreliable entities.”
- Russia has adopted legislation allowing its courts to neutralize the effects of foreign sanctions and to prosecute companies that comply with them.
- The United Kingdom has built a system of autonomous sanctions to strengthen its regulatory independence.
Observers argue that it is now essential for Europe to formulate a comparable response.
Véronique Chabourine highlights that extraterritoriality serves multiple purposes: “Legal extraterritoriality is not only intended to punish: it serves to maintain permanent regulatory uncertainty, undermining the economic sovereignty of the targeted states and permanently discouraging investment”. She refers to research by J. Verellen and M. McCrudden (2021), who found that affected companies “are reconfiguring their investment flows to avoid areas of legal risk.”
This dynamic was reflected in recent European figures. According to UNCTAD, foreign direct investment flows to Europe fell by 58% in 2024. More than half of EU Member States experienced declines. The EY barometer also reported a 5% drop in investment projects. They reached their lowest level in nine years, with notable decreases in France (-14%) and Germany (-17%).
Analysts note that Europe is particularly exposed to this form of lawfare because its global influence relies heavily on the smooth functioning of its commercial, financial, and regulatory networks. The EU maintains the world’s largest global economic footprint. It surpasses both the United States and China, which also makes it vulnerable to extraterritorial legislation, geopolitical fragmentation, and the growing militarization of international relations.
Understanding Extraterritoriality in U.S. and European Law
« The FCPA is a necessary consequence of globalization.”
Laurent Cohen-Tanugi, international law laywer
Laurent Cohen-Tanugi notes that many observers view the statute as a violation of international law. This is because the principle of territoriality traditionally limits each state’s authority to its own territory. In reality, he explains, international law does permit forms of extraterritorial jurisdiction within certain boundaries established by the 1927 Lotus ruling. This ruling forbids states from exercising power on the territory of another state unless international law provides otherwise. Within this framework, each state remains free to adopt the principles of international criminal jurisdiction it considers most appropriate.
According to him, globalization and the digitization of economic activity have naturally led to an expansion of extraterritorial elements in national legislation. Europe has followed this trend with instruments such as the GDPR, the Digital Services Act, and the Digital Markets Act, and has indeed initiated actions against certain platforms for violations of the GDPR.
However, Cohen-Tanugi highlights a key difference. The United States has far greater enforcement capacity, operating as an integrated state with a Department of Justice and specialized agencies capable of implementing extraterritorial laws. Europe, by contrast, does not yet possess equivalent institutional firepower. The European Public Prosecutor’s Office exists, but its mandate is limited to fraud affecting the EU budget. It does not exercise broad extraterritorial authority, largely because the EU is not a state and lacks unified criminal or regulatory institutions.
The « effects doctrine «
Europe does, nevertheless, rely on the “effects doctrine,”* which Cohen-Tanugi considers significant but still insufficient. He also notes that U.S. law is heavily transactional for reasons of efficiency. The U.S. Supreme Court has established a presumption against extraterritoriality. Therefore, if a U.S. statute does not explicitly state that it applies abroad, then it does not. As a result, enforcement operates through a system of negotiated justice. France adopted a similar model through the Sapin II law, which has made corruption cases easier and faster to resolve.
In Cohen-Tanugi’s view, extraterritorial legal tools form part of the broader competitive struggle between major powers. Some critics argue that U.S. extraterritoriality can function as an instrument of economic pressure. At the same time, analysts note that Europe still has structural vulnerabilities that can be exploited within this global legal and economic landscape.
Conclusion
In conclusion, the U.S. FCPA wields significant power, particularly over European companies, which represent a substantial portion of the global market. While Europe is making concerted efforts to respond, there is still considerable room for improvement to fully shield itself from the reach of U.S. laws. At the same time, Europe has enacted the DMA, DSA, and GDPR to protect its users from potential abuses by U.S.-owned social networks, illustrating the strength of European regulation. The key question remains: will European law be able to enforce these measures effectively before it is too late?
* Effects doctrine: when there is an agreement or merger between two foreign companies. If this merger or agreement has an effect on the European market, this is sufficient to give jurisdiction to the EU Commission. It is therefore an extraterritorial theory.
