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The End of Nation States? Part 1: Technology-Induced Sovereignty Transfers

The End of Nation States? Part 1: Technology-Induced Sovereignty Transfers
 Gilles Babinet
Former Advisor on Digital Issues

What if we had to add the end of nation states to the long list of upcoming disruptions? In the current context of deglobalization, the sovereignty of states has been reaffirmed, with, in particular, the emergence of governments expressing their willingness to reclaim their destinies. Yet these states, and all nation states in general, might in fact be more threatened by the digital revolution and meta-platforms that are increasingly able to stand up to them than by liberalism and globalization, as many would argue. In this first article, Gilles Babinet investigates these technology-induced sovereignty transfers.

The origin of nation states

An important part of our modern world was structured in 1648 by the Treaty of Westphalia, which defines nation states as the only sovereign entities to regulate territories that still represent countries today. This change of scale, which disintermediated local lords, was already the consequence of technological revolutions. The latter, among other things, allowed for the rationalization of the use of cannon, which could knock down any castle wall, thus rendering the rule of local potentates obsolete. 

Several factors enabled nation states to establish their sovereignty on a long-term basis and to assert it through the precise demarcation of borders on a considerably larger area. These include military investments in a modern weapons system favoring the use of gunpowder, a postal organization facilitating a more centralized governance, public accounting limiting prevarication, more efficient management of monetary issuance, etc. To date, most armed conflicts have begun precisely because these borders were being challenged, thus demonstrating, if need be, that the notion of sovereignty is primarily linked to territories.

Redefining territories

Nearly half a millennium later, at a time when techniques, information and its processing are being virtualized, one may wonder whether geographical space is still as significant. A progressive yet inevitable evolution seems to be taking place before our eyes. Some of the sovereign states’ small symbols are thus being assimilated by the private sector. For instance, mail went from being delivered by the French postal service La Poste to WhatsApp (younger generations do not use emails). Topographical maps, which used to be produced by public and military institutions, are now the commodity of entirely private actors, such as Apple or Google Maps. Data has become the most important raw material of our time, and only a handful of companies now hold unparalleled economic power and influence. These are the meta-platforms: their huge size allows them to constantly increase the amount of information they master, and thus to refine the algorithms they use to examine and analyze us.

Data has become the most important raw material of our time.

The power of these companies is therefore increasingly linked to their use of the black gold of the 21st century, namely data. What kind of company is able, when starting from scratch, to reach nearly $10 billion in revenues in just a few years? This is the feat just accomplished by Amazon with its Prime Video service, the success of which is due to its ability to know which films best suit each of its users.

Coexisting with meta-platforms

With a valuation of more than $4,100 billion, the five largest American tech companies (Google, Amazon, Facebook, Apple and Microsoft) have symbolically outperformed Germany's GDP (the third largest economy in the world) in terms of valuation. Now, when Tim Cook or Mark Zuckerberg come to Paris, they are the ones who decide who they will meet among the French political staff. In many ways, they act as heads of state would: they impose their schedules on ministers, initially refuse a meeting with the Senate (Mark Zuckerberg), or even claim not to have time to meet the Minister of Economy (one of the leaders of American digital tycoons).

In more concrete terms, these companies are now omnipresent in international negotiations, be it regarding the recent General Data Protection Regulation (GDPR), agreements concerning the processing of data exchanged between Europe and the United States, or the reconsideration of the main tax principles, as envisaged by the OECD in the context of the BEPS (base erosion and profit shifting) project.

The director of public affairs of one of these companies pointed out that when he was in charge of relations with public authorities within a large traditional American company, he obeyed the regulators' instructions without negotiating: "then, we complied". Today, on the contrary, he states: "we don't surrender without negotiating hard first". The argument underlying this new practice is that public servants and politicians do not understand technology, and that tech companies must therefore throw their full weight behind decision-making in order to avoid bad outcomes.

Now, when Tim Cook or Mark Zuckerberg come to Paris, they are the ones who decide who they will meet among the French political staff.

Yet the goal of these Western American players here is not merely to defend their economic interests, but also to promote a vision of the world based on the very values on which California was founded: nonconformity and libertarianism. The latter was largely inherited from the men and women who chose to settle in these remote regions to distance themselves from the straitjacketed spirit of the great cities of Eastern America.

This liberal mindset was later reinforced by the conservative revolution that brought Reagan and Thatcher to power in the 1980s. "In this present crisis, government is not the solution to our problem", Reagan claimed in January 1981 - an idea coherent with the convictions of those who supported central institutions a century earlier. Since then, the idea that, thanks to technology, private players could profitably supersede the state and its public services in the functions they traditionally perform, has kept growing more popular.

Should we expect massive transfers of sovereignty?

Assaults have repeatedly been launched on different occasions and at regular intervals. One of the most famous blows took place during a rather dramatic dialogue between the FBI and Apple, with the former asking for the tools to read the encrypted messages on the iPhone of one of the two terrorists who shot 14 people in the San Bernardino case. Apple refused to give away access to its smartphones, citing the risks it would entail for the confidentiality of its customers’ data. On other occasions, Apple prided itself on defending fundamental rights, such as the right to privacy of conversations, in order to oppose the American state.

Some transfers of sovereignty are sometimes carried out with the explicit support of public institutions.

Some transfers of sovereignty are sometimes carried out with the explicit support of public institutions. Indeed, the right to be forgotten - a measure promoted by the G29 (the group of European regulators of personal data protection) and widely supported by the French CNIL (National Commission on Informatics and Liberty) - directly delegates the decision to process requests from European citizens wishing to remove a link that would incriminate them to platforms. 

Every day, hundreds of thousands of messages are removed by Facebook's 10,000 moderators, thus transferring the management of freedom of expression to private players. While we can hope that Facebook does this in a way that respects minority rights, this is certainly not the case for many other platforms, such as Gab, the social network used by the Pittsburgh killer. 

Several countries (including the US) are currently considering allowing private players to take the law into their own hands when they are victims of a cyber attack by authorizing "hack-back’" i.e. the reciprocation of offensive technologies to the alleged perpetrator of the original attack. The irony lies in the fact that modern institutions were precisely created to prevent each and everyone from taking justice into their own hands. So how should we redesign the role of these institutions and of the nation state more broadly? The second part of this article will address the potential platforms hold in terms of public services, and its implications for the role of governments.

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