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Abstract

The modern digital world relies on the instantaneous transfer of data. This digital highway is essential for the growth of the modern digital economy and contributes to the rise of globalization. In order to facilitate these data transfers, ground rules must first be put into place. To date, there are few, if any, binding international data privacy agreements. This is in part due to practical considerations, such as high administrability costs, inadequate enforcement agencies, and complex jurisdictional procedures. More fundamentally, however, this is due to competing incentive structures, as countries are incentivized to protect their own digital sovereignty by limiting the transfer of their own data, but also wish to accept the data flowing from other countries. The result is a zero-sum game between local data protectionism and free crossborder data flows. To understand how these incentive structures function and how to resolve various gridlocks, this Note delves into the Safe Harbor Agreement between the United States and the European Union and applies an analytical game theory approach to track the agreement’s formation and its eventual breakdown. This Note concludes by proposing several potential solutions to overcome the obstacles preventing the successful implementation of international data privacy agreements.

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