Constructing the International Foundations of E-Commerce: The EU-US Safe Harbor Arrangement

Much recent international relations scholarship has argued that states are unable to control e-commerce, so that private actors are coming to play a dominant role. However, this body of literature fails to account for emerging “hybrid institutions,” in which states create general frameworks of rules, which are then implemented by private actors. This article examines a prominent example of such an institution, the EU-U.S. Safe Harbor arrangement in the field of privacy, and sets out an alternative explanation of state–private actor relations in the sphere of e-commerce. It shows how Safe Harbor had its origins in efforts by the European Union (EU) and United States to mitigate problems of interdependence that threatened to undermine the principles of order on which their regulatory systems were based. Safe Harbor reflects neither the EU nor U.S. approach, but rather a novel blend of state and private regulation. The article demonstrates the vital role of argument and persuasion in identifying Safe Harbor as a solution, and in negotiating its particulars. It finds that conventional game-theoretic accounts of bargaining are unable to explain the negotiation of Safe Harbor, and argues that constructivist approaches should pay more attention to how argument can disclose new possibilities of action.

Henry Farrell (2003), “Constructing the International Foundations of E-Commerce: The EU-US Safe Harbor Arrangement,” International Organization, 57, 2: 277-306.

Access the full article here

Other Writing:

Essay

Binance and the End of Crypto’s Dream to Escape From Government – with Abraham Newman

On Nov. 21, Binance, the world’s largest cryptocurrency exchange, pleaded guilty to breaking U.S. anti-money-laundering laws. Its CEO has stepped down, and the company will pay $4.3 billion in penalties. While the eye-watering fine is getting the headlines, it’s the details of the agreement that really redefine the relationship between government and crypto. U.S. authorities ...
Read Article
Essay

Tornado Cash Is Not Free Speech. It’s a Golem – with Bruce Schneier

In August, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the cryptocurrency platform Tornado Cash, a virtual currency “mixer” designed to make it harder to trace cryptocurrency transactions—and a worldwide favorite money-laundering platform. Americans are now forbidden from using it. According to the U.S. government, Tornado Cash was sanctioned because it allegedly laundered ...
Read Article