Even though Rocket Lab announced in March that it was acquiring the German laser communications company Mynaric for $150 million, and entered into the stock purchase agreement in September, the company has not yet gotten approval for the purchase from the German government, raising questions that approval might be denied.

A central question for regulators and industry observers is whether Mynaric, once owned by Rocket Lab, would still be deemed a European entity — a status that could determine its eligibility to compete for Europe’s planned sovereign communications network, known as IRIS² (Infrastructure for Resilience, Interconnectivity and Security by Satellite). The multibillion-euro program, backed by the European Union, is designed to strengthen Europe’s independence in secure satellite communications and may restrict participation to European-controlled firms.

Those regulators however also have to consider whether IRIS will even fly. Designed to provide a government option to the internet constellations being operated or built by Starlink, Kuiper, and several Chinese projects, it is significantly delayed, vastly over budget, and unlikely to compete very successfully. There have been rumors several EU nations are even balking at building it at all.

If Rocket Labs’ purchase of Mynaric is denied, it will likely not harm that company significantly. It will however be another example of Europe cutting off its nose to spite its face. It will block this American company from providing business to Europe, even as its own government projects wither on the vine.