The digital economy is dynamic, fast expanding, and truly global. The legal framework that currently applies to the digital economy is either divided, fragmented, ad hoc, out of date, or nonexistent. Some legal initiatives quixotically aim at stopping cross-border data flows, reflecting consumer fears regarding privacy and security or government fears about losing tax revenue. The fragmented regulatory environment does not help companies ‘scale up’ digital technologies; in turn, this hampers innovation and global economic growth. In addition, some less digitally developed actors complain that current rules allow or even foster unfair competition.

This article proposes a new and global legal framework for the digital economy: structured cooperation between states and companies under the administration of an autonomous body. States may resist giving up sovereignty, and citizens may fear erosion of their legal rights. However, uniform, consistent, and enforceable rules would benefit both states and citizens. Tax revenue could be fairly assessed and distributed, for example, and citizens and businesses would no longer face divergent privacy and security rules. Regulation would become more legitimate because both public and private stakeholders would participate in rulemaking, including smaller players and digital latecomers. Companies that subscribe to the framework would receive a global ‘trust mark’ that would boost consumer confidence. In sum, a global legal framework, as contemplated, would match the global character of activities in the digital economy.

Reprinted from Legal Issues of Economic Integration 46, no. 3 (2019): 225–246, with permission of Kluwer Law International.

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