Regulatory Power Beyond the Brussels Effect—How Data Localisation Requirements Restructure Global Cloud‐Infrastructures

ABSTRACT The regulatory power of the European Union (EU) is commonly conceptualised as its capacity to externalise its regulations into other jurisdictions, a form of influence widely referred to as the Brussels effect. Yet, within the digital economy, scholars observe a departure from global regulatory convergence toward patterns of competition, conflict, and divergence. These developments raise the question of how changing global conditions affect the nature and scope of the EU's regulatory power in the digital economy. This paper argues that regulatory divergence foregrounds another, less explored aspect of the EU's regulatory power: its structural dimension. It contends that the global influence of European regulations not only operates through regulatory diffusion, but that regulations can also function as instruments of structural power that reshape global (infra)structural networks underpinning the digital economy. These (infra)structural changes, in turn, affect global power dynamics conditioned by those very structures. The argument builds on a two‐dimensional understanding of structural power that bridges the power operating through structures and the power to shape those very structures. The paper illustrates the structural dimension of the regulatory power of the EU through an exploratory case study in the cloud sector, where European data localisation requirements trigger a market mechanism, labelled here as the ‘pull‐in effect’. This mechanism restructures the topography of global infrastructure networks by provoking the establishment of ‘sovereign’ cloud capacities in the EU. By influencing the spatial architecture of these cloud infrastructures, European regulations affect global power dynamics in the data economy by mitigating strategic vulnerabilities arising from asymmetrical interdependence. The paper aims to contribute to scholarly discussions concerned with the consequences of regulatory convergence in the digital economy, changing (infra‐)structural dynamics, and the geoeconomic turn of the EU.