DATA REGULATIONS AND DIGITAL SOVEREIGNTY: A NEW CHALLENGE TO INTERNATIONAL INVESTMENT LAW

Abstract

With the rapid expansion of the digital economy, states have increasingly sought to assert digital sovereignty through the enactment of new data regulations. These include data‑localization requirements, restrictions on cross‑border data flows, and comprehensive privacy frameworks, all aimed at safeguarding national security, protecting individual privacy, and supporting domestic industries. Governments—most prominently within the European Union, China, and other jurisdictions—conceptualize digital sovereignty as the capacity to act autonomously in the digital sphere or to exercise control over their digital destiny. Yet, such measures inevitably intersect with the principles of international investment law, requiring scrutiny by foreign investors and arbitral tribunals. This paper examines the tensions between sovereign data‑control policies and treaty‑based investment protections, providing background on the evolution of multi‑layered digital regulation and situating these developments within the broader framework of international economic law.