Defense offsets are widespread compensation practices in the world's armaments sector. Globally, they are gaining importance in terms of both quality and quantity. Against this worldwide trend and despite individual disadvantages, however, most EU member states are suddenly prohibiting offsets. This paper explains this puzzling development by a novel approach. It builds on relational authority, triadic governance and judicial politics. In contrast to the widespread wisdom that there is no supranational authority in national defense policies, we argue that the European Commission strategically used case law of the European Court of Justice to overcome the resistance of sovereign governments. It unilaterally interpreted member states’ practices and threatened with infringement proceedings, if governments would not comply. Put differently, authority beyond the nation state is not only exercised by a threat of exclusion, but – in triadic systems – also in terms of judicial politics.
