The modern realignment of legal norms by nations to address the trade in identity is driven in part by a desire to retain sovereignty.[1] The explosion in information and communication technology threatens sovereignty because the resulting trade in identity has exposed a failure in the social contract to adequately protect individual security from intrusive market behaviors.[2] The shift in legal norms must produce a social contract that sufficiently provides and protects the selective privacy an individual relies on to formulate their identity. The welfare of individual security must become a primary focus of the foundation of the global economy.[3]
However, current technology challenge this modern realignment of vertical regulatory frameworks because digital communications present a different form of intrusion into individual security.[4] Paralleling the impact of combustible engines and steam, the internet shifted connectivity by opening markets worldwide and compressing the time to trade in those markets to mere seconds. Smart devices and wireless connectivity enabled the global trade of goods continuously.
But innovations within big data and artificial intelligence did more than optimize the trade of goods. They also established the trade of identity. By collecting, monitoring, and monetizing individual behavior in the global marketplace well before an individual engages in an actual trade of a good or service, the digital communication revolution intruded into selective privacy. The innovations of the early 1900s encroached upon public spaces through train stations, electric cables, and steamships. But telecommunications and transportation of that era did not invade the selective privacy of an individual. Today’s digital innovations reach into the individual space most important to the formation of identity – the personal moments where an individual seeks information to decide how to engage with the world.[5] Smart devices in combination with the artificial intelligence that processes big data have enabled an entirely new global flow: the trade of identity.
The monetization of selective privacy has significant value because it captures insights into how custom and beliefs influence individual behavior in the global trade of goods and services. For example, the rise of power concentrated in mass media and data collection has shifted advertising into targeting.[6] This shift led to an explosion in surveillance that propelled technology companies into dominant market actors.[7] To be colloquial, there is a monetary reason Amazon is delighted to learn the contents of your fridge and Google is thrilled to assist your every search on every whim. Both will conveniently keep your history handy to map your identity and trade access to it globally. The scope of intrusion upon individual security is different in nature and kind. This difference in form challenges nations to formulate an adequate and appropriate change in the vertical regulatory framework to restore selective privacy. Additionally, timing is critical because as AI introduces custom chatbots with zealous agreeableness and unlimited generative information, lack of data privacy risks enveloping any individual with an internet connection into a distorted world where identity loses any anchor to its formation.[8]
Whatever the urgency, the challenge to design a new social contract remains the familiar economic problems of externalities.[9] The global trade of identity may be new, but the classic concern of a free rider problem is not.[10] Trade in identity produces big data at the expense of individual security and market actors are not sufficiently internalizing this negative externality. Examples where legal norms could better support internalizing the costs of identity trading are creating private rights regarding data breaches, restricting, and penalizing the collection of data on children, and requiring that operating systems offer a privacy setting for no-solicitation/no-harvesting. Similar to separation requirements in journalism and banking, regulations requiring social, search, and shopping platforms to decouple from data farming could help redistribute the costs of using such data more equitably across the global economy. The market actors within big data have amassed sufficient market power to force other actors to engage in the trade of identity to remain viable and competitive in the global economy. Similar to railroad access in the early 1900s, market actors that fail to use big data are disadvantaged in reaching consumers. Dominant big data market actors – such as Google, Facebook, and Amazon – can also shift their capital globally, producing a chilling effect on changing national legal norms. And similar to railroads, these actors can also shift the costs of social harms created by individual insecurity. Therefore, policy makers in each nation can and should explore how to re-calibrate the protections around selective privacy.
Recalibrating legal norms to address trade in identity can restore consent as a required element to trespass into an individual’s privacy. Currently, legal norms for antitrust struggle to account for regulating trade in identity as consumer harm.[11] Initial access to the global flows found online is at no monetary cost to individuals. Simply enter the internet, create a free personal account, and search and shop. But the true price of this access is the nonconsensual trade of the data that an account generates. Big data, without payment to individuals for the trespass into selective privacy, injures individual security without accounting for the social cost. This harm undermines adequate protection of selective privacy by a vertical regulatory framework and destabilizes the social contract within a nation.[12]
As increased connectivity spread across the globe, the trade in identity enabled an erosion of one’s ability to independently form a traditional identity.[13] The extent of the erosion can be seen in information manipulation such as removing or ‘darkening’ journalism, political positions and even children’s books.[14] And this erosion has familiar warning signs of immigration and social movements.[15] As a sense of place and attachment via common descent and a shared history and language erodes, an uptick in migration has again emerged.[16] Questions of the shared customs, values, and beliefs have surfaced as debates around environmental concerns rise.[17] As societal pressures build, the decrease in the selective privacy to contemplate such concerns resulting from trade in identity brings the formation of one’s sense of values and self under duress. Oppression by government tracking is a concern of such intrusions, but digital identity slavery whereby private actors buy and sell data privacy is another.[18] To permit the purchase of part of persons privacy risks permitting the purchase of the entire person.[19] As such, the legal norms of vertical regulatory frameworks must instill accountability for when trade in identity intrudes upon selective privacy. It is a primary function of a nation to enforce such accountability, especially for the adequate protection of individual security that underlies its social contract.[20] Nations must restore a sustainable legal framework that internalizes the harms caused to individual security by information and communication technology trading on identity.[21]
The restoration of sustainable legal norms that provide individual security demands that nations maximize their protection of selective privacy.[22] It is no longer sufficient to rely on the slow evolution of common law to provide adjustments in sufficient speed and degree to address the rising concerns globally.[23] Even the American vertical regulatory framework, with the Madisonian value of “diversity of faculties” ingrained in its ethos, must evolve.[24] The “specific guarantees in the Bill of Rights” that create “various guarantees” of “zones of privacy” must confront the digital era.[25] While tort law offers a powerful mechanism for addressing harms between private actors, the concerning rise in nationalism and environmentalism warns sufficient judicial solutions may not be available.[26] Additionally, the social harms caused by market actors monetizing the trade of identity are accumulating on a global scale.[27] To avoid larger social disruption, nations must engage in political solutions domestically and internationally for individual security.
Consequently, realigning vertical regulatory frameworks for selective privacy is a political process which may or may not navigate through judicial stages for its societal acceptance.[28] The political process to redefine a nation’s social contract raises concerns about political incentives. Nations use sovereign power in varying degrees to control citizens. Undemocratic nations that limit selective privacy are inclined to partner with market actors to preserve intrusive access.[29] For example, digital authoritarianism implements government controls over both the infrastructure and application layer of the web which in turn controls political behaviors ranging from free expression to tracking physical movement.[30] By providing internet access, an authoritarian regime does not need human capital to monitor and manage its citizens. In the modern area, such a nation has big data market actors. This is a serious temptation for undemocratic vertical regulatory structures to embrace more intrusion and in turn further destabilize the international system supporting the global economy. Assuming that a nation overcomes the temptation to align with big data actors, there is still the delicate nature of adjusting the social contract with its citizens. The political process is subject to problems of speed and acceptance and is fraught with risks of unintended consequences. Nevertheless, the time has come for nations to address individual security when accessing and engaging in the global economy.
[1] See Mathias Risse, A Précis of on Global Justice, with Emphasis on Implications for International Institutions, 54 B.C.L. Rev. 1037, 1051-52 (2013), http://lawdigitalcommons.bc.edu/bclr/vol54/iss3/.
[2] See Frank J. Garcia, Restoring Trade’s Social Contract in the United States, 1-3 (Working Paper, Feb. 28. 2022).
[3] See Frank J. Garcia, Restoring Trade’s Social Contract in the United States, 1-3 (Working Paper, Feb. 28. 2022).
[4] See Mathias Risse, A Précis of on Global Justice, with Emphasis on Implications for International Institutions, 54 B.C.L. Rev. 1037, 1051-52 (2013), http://lawdigitalcommons.bc.edu/bclr/vol54/iss3/.
[5] See Mathias Risse, A Précis of on Global Justice, with Emphasis on Implications for International Institutions, 54 B.C.L. Rev. 1037, 1051-52 (2013), http://lawdigitalcommons.bc.edu/bclr/vol54/iss3/.
[6] See ELena Boldyreva, Cambridge Analytica: Ethics and Online Manipulation with Decision-Making Process, 92-93 (May 2019).
[7] See Kara Frederick, Combating Big Tech’s Totalitarianism: A Road Map, Backgrounder No. 3678, The Heritage Foundation (Feb. 7, 2022), 24, http://report.heritage.org/bg3678; https://ercouncil.org/2019/top-ten-companies-by-market-cap-over-20-years/ (last visited May 10, 2022).
[8] See Myra Cheng et al. ,Sycophantic AI decreases prosocial intentions and promotes dependence.Science391,eaec8352(2026).DOI:10.1126/science.aec8352, https://www.science.org/doi/10.1126/science.aec8352; Ula Chrobak, AI overly affirms users asking for personal advice, Sanford Report, https://news.stanford.edu/stories/2026/03/ai-advice-sycophantic-models-research (Mar. 26, 2026); Lu W, Hu Z. Addressing Autonomy Risks in Generative Chatbots with the Socratic Method. Sci Eng Ethics. 2025 Nov 26;31(6):41. doi: 10.1007/s11948-025-00567-8. PMID: 41296228; PMCID: PMC12657563, https://pmc.ncbi.nlm.nih.gov/articles/PMC12657563/ (last visited Apr. 15, 2026).
[9] See https://www.economicshelp.org/blog/glossary/externalities/ (last visited Apr. 22, 2022).
[10] See https://www.economicshelp.org/blog/1626/economics/free-rider-problem/ (last visited Apr. 22, 2022)
[11] See Frank J. Garcia, Global Justice and International Economic Law: Three Takes, 162 Cambridge University Press (2013).
[12] See Mathias Risse, A Précis of on Global Justice, with Emphasis on Implications for International Institutions, 54 B.C.L. Rev. 1037, 1051-52 (2013), http://lawdigitalcommons.bc.edu/bclr/vol54/iss3/; Joseph E. Stiglitz, Globalization and its Discontents Revisited: Anti-Globalization in the Era of Trump 96, 171-73 (W.W. Norton & Company, Inc., 2nd ed. 2002).
[13] See Marilyn Cornelius and Thomas N. Robinson, Global identity and environmental sustainability: Related attitudes and actions 6 (2011) (unpublished manuscript) (on file with Precourt Energy Efficiency Center at Stanford University); Gerald Casper, The Concept of National Citizenship in the Contemporary World: Identity or Volition?, Bucerius Law School, 1 (2008).
[14] See Kara Frederick, Combating Big Tech’s Totalitarianism: A Road Map, Backgrounder No. 3678, The Heritage Foundation (Feb. 7, 2022), 2-6, http://report.heritage.org/bg3678.
[15] See Marie McAuliffe and Binod Khadria, World Migration Report 2020 7-8 (2020).
[16]See Marilyn Cornelius and Thomas N. Robinson, Global identity and environmental sustainability: Related attitudes and actions 6 (2011) (unpublished manuscript) (on file with Precourt Energy Efficiency Center at Stanford University); Gerald Casper, The Concept of National Citizenship in the Contemporary World: Identity or Volition?, Bucerius Law School, 1 (2008).
[17] See Marilyn Cornelius and Thomas N. Robinson, Global identity and environmental sustainability: Related attitudes and actions 6 (2011) (unpublished manuscript) (on file with Precourt Energy Efficiency Center at Stanford University); Gerald Casper, The Concept of National Citizenship in the Contemporary World: Identity or Volition?, Bucerius Law School, 1 (2008).
[18] See Alina Polyakova and Chris Meserole, Exporting digital authoritarianism, The Brookings Institute, Aug. 2019, https://www.brookings.edu/research/exporting-digital-authoritarianism/ (last visited Apr. 29, 2022).
[19] See Alina Polyakova and Chris Meserole, Exporting digital authoritarianism, The Brookings Institute, Aug. 2019, https://www.brookings.edu/research/exporting-digital-authoritarianism/ (last visited Apr. 29, 2022).
[20] See James Madison, The Federalist Papers : No. 10 (1787).
[21] See Frank J. Garcia, Global Justice and International Economic Law: Three Takes, 159-168 Cambridge University Press (2013).
[22] See Frank J. Garcia, Restoring Trade’s Social Contract in the United States, 1-3 (Working Paper, Feb. 28. 2022); Shi-Ling Hsu, Capitalism and the Environment: A Proposal to Save the Planet, 32 (Cambridge University Press, eds. 2021).
[23] See Joseph E. Stiglitz, Globalization and its Discontents Revisited: Anti-Globalization in the Era of Trump 390-91 (W.W. Norton & Company, Inc., 2nd ed. 2002).
[24] See James Madison, The Federalist Papers : No. 10 (1787).
[25] See Griswold v. Connecticut, 381 U.S. 479, 484, 85 S. Ct. 1678, 1681 (1965).
[26] See John Hasnas, Market Failure, Regulation, and Invisible Gorillas, 19 Geo. J. of L. & Pub. Pol’y 813, 828-29 (2022).
[27] See Marie McAuliffe and Binod Khadria, World Migration Report 2020 7-8 (2020); Frank J. Garcia, Global Justice and International Economic Law: Three Takes, 159-168 Cambridge University Press (2013).
[28] See Frank J. Garcia, Restoring Trade’s Social Contract in the United States, 1-3 (Working Paper, Feb. 28. 2022); Shi-Ling Hsu, Capitalism and the Environment: A Proposal to Save the Planet, 32 (Cambridge University Press, eds. 2021).
[29] See Alina Polyakova and Chris Meserole, Exporting digital authoritarianism, The Brookings Institute, Aug. 2019, https://www.brookings.edu/research/exporting-digital-authoritarianism/ (last visited Apr. 29, 2022).
[30] See Alina Polyakova and Chris Meserole, Exporting digital authoritarianism, The Brookings Institute, Aug. 2019, https://www.brookings.edu/research/exporting-digital-authoritarianism/ (last visited Apr. 29, 2022).
