BIICL and Cooley LLP are delighted to present our study on Technology-Based Disputes and Investment Treaty Arbitration.
The technology sector has emerged as the dominant force in the global economy, with digital platforms, software companies and technology enabled services reshaping commerce, communication and social interaction. Technology companies now represent nine of the world's 10 most valuable corporations by market capitalisation, with a collective valuation exceeding $10 trillion (this is the combined economies of Japan, Germany and the UK). A dramatic shift in regulatory approaches is accompanying this economic transformation, as governments worldwide grapple with challenges ranging from data privacy and cybersecurity to market dominance and content moderation.
The intersection of technology-sector regulation and international investment law represents one of the most significant emerging frontiers in investor-state dispute settlement (ISDS). Whilst investment treaty arbitration has traditionally focused on disputes involving natural resources, infrastructure and manufacturing, today technology companies are increasingly starting to invoke investment treaty protections to challenge regulatory or other measures affecting their operations. This development raises fundamental questions about the applicability of analogue-era legal concepts to the digital economy.
Scope of the study
This paper examines how investment treaty law applies to technology-sector regulation through both doctrinal analysis and empirical review of arbitral practice. It is structured around three key areas:
- What constitutes a protected "investment" for technology businesses
- Jurisdictional and territorial challenges arising from digital and platform-based business models
- How regulatory measures engage core investment treaty standards, including fair and equitable treatment (FET), expropriation, and non-discrimination
Key findings
- Data has become a core asset of the global economy, underpinning AI, analytics and cross-border digital services. As reliance on data grows, disputes involving technology companies are likely to increase, particularly as regulatory intervention intensifies.
- Technology firms now dominate global markets and exert influence beyond commerce, prompting governments to adopt stricter rules. This creates structural tension between innovation and state sovereignty.
- Although few investment treaty claims have historically been brought by tech companies, this is likely to change as regulation expands in areas such as data protection, AI and platform governance.
- Tech companies typically operate through centralised decision-making and globally distributed services, often without significant physical presence in each market. This raises jurisdictional challenges, particularly in establishing investor status and territorial nexus under investment treaties.
- To qualify for protection, claimants must show an "investment," often assessed under the Salini criteria (contribution, risk, duration and economic impact). While assets like data centres or long-term contracts may qualify, asset-light digital models are more complex. Whether data itself constitutes an investment remains unresolved but plausible under broad treaty definitions.
- Substantively, disputes are likely to focus on fair and equitable treatment, non-discrimination and expropriation. As regulation deepens, tech-related arbitration is set to expand.
Authors
This study is co-authored by Prof. Yarik Kryvoi, Director of the Investment Treaty Forum (ITF) at BIICL together with Charlie Lightfoot and Juan Nascimbene of Cooley LLP.
