Digital Fiefdoms and Human Rights

The unprecedented rise of artificial intelligence (AI) and data-driven digital technologies has transformed traditional capitalism (p. 66–67), constructing a structural system of exploitation termed “technofeudalism” (p. 170–175). In this novel architecture, mega-technology companies dominate markets, individuals and communities through digital fiefdoms built upon “cloud capital” replacing conventional markets (p. 87–88).

This paradigm shift creates a profound crisis within the frameworks of Business and Human Rights (BHR) and the Right to Development (RTD), resting on two focal points. First, unlike traditional sectors where human rights violations are often byproducts of operations, the crisis stems from AI and data-driven technologies relying on business models inherently exploitative by design. Second, the traditional theory of the state, predicated on the nation-state’s regulatory and judicial monopoly, is now confronted with the severe threat of “corporate capture” by this new form of capital (p. 412–413). Transnational technology companies hollow out the state’s fundamental obligation to protect human rights by establishing their own private judicial and supervisory domains through algorithmic governance mechanisms, as illustrated below.

Also, the framing of AI access and digitalisation as a democratic promise of a “new social contract”, recently championed by OpenAI and its co-founder/CEO Sam Altman, is merely an illusion. Equally concerning is how Palantir penetrates the core of sovereign state functions; their leadership openly advocates a military industrial complex driven by AI without democratic accountability. Whether masked as democratic promise or national security, these narratives legitimise businesses grounded on data extractivism that are inherently exploitative (paras 65, 74–75).

Within this asymmetric spiral of power, the RTD’s principles of “active, free and meaningful participation in development” and the “fair distribution of benefits” are systematically violated. In the digital age, vulnerability is reproduced not solely through traditional identity affiliations, but also through the structural inequalities imposed by algorithmic systems and the corporations that control them (p. 61).

Thus, two main groups emerge that require protection under international human rights norms. The first is the vast population, predominantly in the global South, who lack access to basic digital infrastructure and the internet (para. 47). This deprivation goes beyond a mere deficit in physical infrastructure; it creates a new state of “digital statelessness” (p. 178). While traditional statelessness deprives individuals of nation-state protection, digital statelessness systematically excludes people from fundamental public services such as education, healthcare, social welfare, and banking, which are increasingly digitised. Deprived of network access and digital literacy, their participation in global development and ability to receive a fair share of digital wealth becomes virtually impossible (para 16). Consequently, the digital divide has emerged as one of the most vital structural barriers to the RTD (para 51).

The second vulnerable group consists of precarious gig workers. Algorithms entirely manage their work-finding, remuneration and dismissal processes. Technology companies classify these workers under the guise of “independent contractors”, circumventing fundamental labour law protections such as the minimum wage, unionisation, occupational health and safety, and social security. This group is kept under constant behavioural and biometric surveillance by opaque “black box” algorithms (p. 50–54). They are exploited under deep “algorithmic domination” and anxiety (p. 59–63), facing constant threat of deactivation without the right to an effective remedy (paras 37, 49). Their usurped rights extend beyond the RTD to the rights to just and favourable conditions of work, the protection of physical and mental well-being, and social security guaranteed under the International Covenant on Economic, Social and Cultural Rights (ICESCR), along with the right to an effective remedy.

Corporate Capture and the Inadequacy of BHR

The international BHR regime relies largely on the United Nations Guiding Principles on Business and Human Rights (UNGPs). Alongside the state’s duty to protect human rights, the UNGPs attribute a voluntary responsibility to corporate actors to “respect” human rights (Principles 1 and 11). However, in the era of technofeudalism, where technology giants are expanding at an unprecedented rate and establishing a digital hegemony that transcends nation-state borders, these traditional mechanisms are experiencing a structural and theoretical crisis.

The Human Rights Due Diligence (HRDD) process lies at the centre of the UNGPs, advising companies to identify, prevent, and mitigate potential human rights abuses arising from their operations and resting fundamentally on the negative obligation of “do no harm”. However, for the digital precariat and data workers, this approach encounters an ontological impasse. Constant algorithmic surveillance and the precaritisation of gig economy workers are not side effects of these technology platforms, but the very reason for their existence. Business models founded upon data extractivism and flexible labour exploitation are (paras 74–75) inherently harmful to human rights (p. 48–49). Therefore, the structural devastation generated by a system exploitative by design cannot be eradicated or legitimised through a procedural HRDD exercise conducted internally by the company itself.

The voluntary nature of the BHR framework allows tech giants to reduce accountability to a mere PR exercise. Amid vast power asymmetries, corporations privatise judicial processes through operational-level grievance mechanisms (OLGMs) (p. 44–46). Rather than offering a genuine avenue for seeking justice, these mechanisms act as a buffer, masking structural deficiencies and confining victims’ voices within corporate boundaries. Such internal mechanisms cannot be impartial where gig workers live in constant fear of automatic deactivation from the platforms. Consequently, the HRDD process prescribed by the UNGPs fails to rectify the “inequality of harms and arms” between victims and mega-corporations, instead transforming into a cosmetic compliance where companies obscure violations by merely completing procedural steps.

The greatest theoretical shortcoming of the current BHR system is its continued conceptualisation of States as independent regulators impartially overseeing the market. Yet with the rise of authoritarian neoliberalism, traditional state theory is being fundamentally shaken, as capital groups establish immense domination over States not only economically but also in regulatory and judicial spheres. As recently called for by Sam Altman, tech giants have entered into a “very close partnership” with governments, as a proximity that is set to increase. This has led to corporate capture, where state institutions and judicial organs are drawn into the orbit of corporate interests. OpenAI’s promise of a new social contract is, in fact, an attempt to impose their own rules on the entire world rather than being regulated externally. Palantir champions this same attempt; its unelected leadership dismisses public participation as theatrical debate, arguing Silicon Valley must play a direct role in addressing violent crime through AI-state surveillance, while openly rejecting cultural pluralism and branding other cultures as dysfunctional to justify its expansion. Consequently, confronted by a structure that rejects external oversight and establishes its own legal supremacy, the extent to which the regulatory and judicial capacities and obligations of States remain meaningful should be questioned.

DCRTD: Rules and Limitations

Against the shortcomings of the existing BHR regime, the Draft Convention on the Right to Development (DCRTD) promises a paradigm shift in international law. While it is currently non-binding and subject to further negotiation, DCRTD establishes a strong normative foundation. Yet, a closer reading reveals critical tensions when measured against the contemporary realities of the state-capital relationship.

Articles 1 and 4 of the DCRTD frame development not as economic growth metrics, but as a process guaranteeing the “active, free and meaningful participation” of all individuals and peoples in development, alongside the “fair distribution” of its benefits. Article 6(2) further affirms that the RTD is indivisible from civil, political, economic, social and cultural rights. For the digital precariat living under algorithmic surveillance and domination, these provisions establish that the data extractivist business models of technology giants, which systematically exclude gig workers from decision-making whilst monopolising profit, are fundamentally incompatible with the DCRTD’s core objectives and the principle of fair distribution.

The most transformative aspect of the DCRTD lies in Article 2(a), which brings transnational corporations within the scope of international human rights law as “legal persons”. Article 7 goes further, establishing a direct and general obligation on legal persons under international law to refrain from participating in RTD violations, changing the traditional voluntariness shield of the BHR framework. Article 11 additionally requires States to adopt legislative and administrative measures ensuring that corporations within their jurisdiction and control do not undermine the RTD, including through cross-border activities (p. 17–18), reinforced by the “right to regulate” enshrined in Article 3(h), a guarantee for States seeking to secure sustainable development on behalf of rights-holders.

At the legal level, these provisions offer a strong foundation for mandatory HRDD legislation. Yet a critical reading reveals that this state-centric framework does not align with practical reality, since State institutions have ceased to function as impartial regulators overseeing the market on behalf of the public (para 28). They have instead become devices facilitating capital gathering and digital rent extraction through legal and institutional reform, while suspending judicial independence. Where mega-corporations directly lobby States to shape the rules in their favour and privatise judicial oversight through their own OLGMs, assigning primary protection and regulatory duties to States under Article 3(h) risks producing both a theoretical and a practical illusion.

The RTD of the populations left behind by the digital divide is in systematic conflict with the intellectual property (IP) regimes, such as the TRIPS Agreement (paras 58–62). Overprotection of IP rights prevents the transfer of revolutionary technologies and essential knowledge to the “digitally stateless”, violating the principle of fair distribution. Article 13 DCRTD governs the obligation of international cooperation, requiring States to act jointly or separately to dismantle the structural barriers to development. It also mandates the transfer and dissemination of scientific and technological developments, including those aligned with human rights standards, to developing countries on favourable terms (see also, Article 15(1)(b) and (4) ICESCR). Nonetheless, developing countries can mostly access AI technologies for their public services as paying clients of proprietary systems. Being unable to inspect, adapt, or replicate them reproduces the very dependency the DCRTD seeks to dismantle. Where AI giants shield their core technologies through trade secret rules, the knowledge required for genuine technology transfer remains locked (para 46), an impasse deepened by digital trade agreements that prohibit governments from compelling disclosure of proprietary algorithms and source code, consolidating corporate interests over equitable access (USMCA, CPTPP). Consequently, the question of how technology transfer provisions can be effectively enforced remains one of the weakest practical links of the human rights framework.

On a stronger note, the DCRTD does contain provisions confronting this very tension, though their interplay with existing trade and IP regimes remains uncertain, even should the draft eventually bind States. Accordingly, Article 19 DCRTD provides that no argument grounded in the free market, innovation, or economic growth may be invoked to restrict the exercise of the RTD in a manner inconsistent with international law. Article 24 further introduces a rule of “harmonious interpretation”, ensuring that other international agreements, including investment and IP treaties, cannot be applied in ways that undermine or nullify the object and purpose of the DCRTD.

A Call for a Human Rights-Based Economy

In conclusion, the DCRTD offers a robust legal framework insofar as it attributes obligations to transnational corporations and equips States with a duty to protect. Yet in the technofeudal order, where state-capital cooperation has become deeply entwined and regulatory institutions have themselves been captured, purely convention-based commitments will fall short of ending structural exploitation, namely data extractivism and digital exclusion. Legal texts can only become genuine guarantees when coupled with a demand for a “human rights-based economy” built from the ground up (p. 206–207). This radical transformation requires corporations to move beyond the procedural mitigation of adverse impacts and instead be bound by transformative macroeconomic policies capable of dismantling digital statelessness, poverty and algorithmic domination. Ultimately, the social contract of the new age cannot be a privilege designed behind closed doors by technology monopolies. It must be a binding architecture of global justice, shaped through the active, free and meaningful participation of peoples and marginalised groups in development processes, reclaiming in the public interest the technological commons surrendered to capital.