The European utilities sectors exemplify the transformation of regulatory capitalism, with far reaching changes occurring at both European Union and domestic levels. Liberalization is the dominant trend, accompanied by the emergence of regulatory regimes designed to promote competition in the imperfect markets characteristic of the utilities sectors. These general trends, however, conceal cross-sectoral and cross-national variations in the pace and extent of liberalization and in the composition of the emergent regulatory regimes. This article uses a stepwise comparative method to analyze regulatory change in the electricity and telecoms sectors in Germany and France. It explains the pattern of similarity and variation in terms of the interplay between globalization pressures, the policy transfer effects of EU institutions, and the domestic institutional environment.