Sabino Cassese, an emeritus judge of Italy's Constitutional Court, has warned that global digital giants now operate as supranational empires dictating terms to nation-states, reversing the post-World War II order where governments set the rules and private actors followed. Speaking at the Festival dell'Economia in Trento—a major annual gathering organized by Gruppo 24 Ore and Trentino Marketing for Italy's Provincia Autonoma di Trento—the jurist outlined how the digital age has fundamentally shifted the balance of power away from sovereign nations.
The remarks, delivered during a panel titled "Digital Empires, Old and New Globalization" at the Teatro Sociale on May 24, address a reality Italians encounter daily: the legal frameworks governing their digital lives are increasingly shaped by entities headquartered in Silicon Valley or Shenzhen, not Rome or Brussels. It's visible every time Brussels attempts to rein in tech platforms, only to watch those same platforms adapt in ways that minimize compliance costs while preserving global business models.
From State-Centric Order to Corporate Sovereignty
Cassese, also a professor emeritus at the Scuola Normale Superiore di Pisa, drew a sharp contrast between 1945 and 2026. After World War II, sovereign states created the United Nations, a public institution designed to manage interstate relations. Today, the dynamic has inverted. Tech giants emerge as supranational from inception, wielding economic clout that rivals mid-sized national economies. These firms set technical standards, content moderation policies, and data governance norms—then demand that governments adjust domestic law to accommodate their operations.
The jurist described this as a "hybrid legal regime," where public authorities like the United States government issue directives, but private corporations execute those orders across borders. The result: a company based in California can restrict access to services in Milan, freeze digital payment accounts in Naples, or delist content in Palermo—all with limited recourse for Italian users or regulators.
Why This Matters
• Regulatory asymmetry: Italy and the European Union can legislate within their borders, but enforcement stops at the frontier. Digital platforms operate globally from day one.
• AI-driven decision-making: Algorithms now influence credit access, job applications, and content moderation—decisions that affect Italian citizens but are made by foreign entities with minimal local accountability.
• Data sovereignty concerns: According to Stanford HAI's AI Index Report 2026, over 40% of the world's usable data originates in China, while the United States commands $285.9 billion in private AI investment. Italy, despite ambitious EU regulations, holds negligible leverage in this duopoly.
The U.S.-China AI Race and Italy's Position
The global AI landscape is dominated by a "technological cold war" between Washington and Beijing. In 2025, private U.S. investment in artificial intelligence reached $285.9 billion—twenty-three times China's $12.4 billion, per Stanford HAI's AI Index Report 2026. Yet Beijing benefits from centralized state planning, massive infrastructure projects, and a digital ecosystem generating more data than any other nation. The U.S. has imposed strict export controls on advanced AI chips and electronic design automation software destined for China, forcing Shenzhen to pursue self-sufficiency in semiconductor manufacturing.
The performance gap between U.S. and Chinese large language models narrowed significantly to just 39 points in March 2026, down from over 1,300 points in May 2023, according to the same Stanford report. Meanwhile, China has produced a flood of AI-related patents and scientific publications, while the U.S. maintains dominance in advanced semiconductors and high-performance computing. Europe, including Italy, lags significantly in both investment and innovation, despite ambitious regulatory agendas.
For Italy, this bifurcation creates practical headaches. Italian universities and research institutions must navigate export restrictions when collaborating with Chinese partners. Italy-based companies evaluating cloud services or AI tools face a landscape where American providers dominate but remain subject to U.S. national security directives, while Chinese alternatives come with data residency concerns and limited EU regulatory alignment.
Cassese's panel co-participant, Paolo Benanti of LUISS Guido Carli University, has been a vocal advocate for ethical AI governance—a stance that resonates in Rome but carries limited weight in Cupertino or Shenzhen. The festival itself, running from May 20 to 24 under the theme "From the Market to New Powers: The Hopes of the Young," underscored generational anxieties about whether democratic institutions can keep pace with technological change.
What This Means for Residents and Businesses
The Italy regulatory environment is heavily influenced by Brussels, which has rolled out an extensive slate of digital laws between 2024 and 2026. The Digital Markets Act (DMA), fully operational since January 2025, designates Alphabet/Google, Amazon, Apple, ByteDance/TikTok, Meta, and Microsoft as "gatekeepers" and compels them to allow app uninstallation, service interoperability, and third-party payment systems. By mid-2026, the European Commission will publish enforcement reports and conduct cloud market investigations.
The Digital Services Act (DSA), applicable to all online platforms since February 2024, requires transparency reports and content moderation accountability. From early 2026, harmonized data collection protocols will feed into Commission oversight. The AI Act introduces phased compliance: bans on unacceptable AI practices took effect in February 2025, obligations for general-purpose AI models arrive in July 2025, and high-risk AI system rules become binding in August 2026. Each EU member state, including Italy, must establish at least one regulatory sandbox for AI experimentation by August 2026.
For Italian entrepreneurs and SMEs, this means navigating a thicket of compliance obligations while competing against firms that can spread regulatory costs across global revenue bases. A Milan-based fintech must meet Digital Operational Resilience Act (DORA) standards—fully in force since January 2025—while ensuring its AI-driven credit scoring aligns with the AI Act's transparency mandates. Meanwhile, a competitor in San Francisco or Shanghai faces no such dual burden.
Europe's Territorial Constraint
Cassese highlighted a fundamental limitation: Europe cannot operate globally in the same way digital empires can. Brussels can regulate what happens inside the single market, but it cannot compel a Seattle-based cloud provider to restructure its worldwide architecture. The proposed Tech Sovereignty Act, expected by late 2025 or early 2026, aims to foster sovereign cloud infrastructure and "AI Gigafactories" across the EU. Yet these initiatives require massive capital investment and long lead times—luxuries in a race where AI capabilities double annually.
The jurist suggested that cooperation, akin to the early governance model for the internet, remains the ideal path. If that fails, he warned, the world may revert to the fragmented globalization of a decade or two ago, with regional blocs operating behind digital borders. He dismissed the UN as a viable coordinating body, noting that aligning 193 member states on complex technical issues is "too complex."
His provocative alternative: a "world state" for digital governance—a concept that remains utopian but underscores the inadequacy of current mechanisms. The Global Digital Compact, launched by UN Secretary-General António Guterres and signed by 152 countries, aims to bridge the digital divide, protect human rights online, and combat disinformation. Yet critics, including voices at the Trento festival, question whether a multilateral body can match the agility of firms whose market capitalizations exceed the GDP of most UN members.
How Italian Residents and Businesses Can Respond
For residents of Italy, understanding your rights and available resources is essential. You can file complaints about platform conduct with the Italian Data Protection Authority (Autorità Garante per la Protezione dei Dati Personali) or report violations of the Digital Services Act to your national competent authority. The European Commission's Digital Services Coordinators maintain a database of complaint procedures by country.
If your business is affected by digital gatekeepers, document compliance burdens and file reports with the Italian Competition Authority or directly with the European Commission's DMA Task Force. Organizations can also participate in EU regulatory sandboxes to test AI tools in controlled environments—contact your regional Chamber of Commerce for details on approved programs.
For data protection, residents should review privacy settings on major platforms, use available privacy tools, and consider compliant alternative services. Tools like the GDPR Information Portal maintained by the Italian Data Protection Authority and resources from Centro Hermes provide guidance on digital rights and resistance to surveillance. Advocacy organizations like Ciberspazio and Cittadinanza Digitale offer practical support for Italian citizens navigating platform disputes.
The National Sovereignty Question
National sovereignty in the digital realm is increasingly theoretical. When Meta adjusts its content moderation algorithm or Google tweaks its search ranking, the effects ripple through Italian newsrooms, e-commerce sites, and civic discourse—yet Rome has no direct lever to shape those decisions.
Italy's best avenue for influence runs through Brussels, where the DMA, DSA, and AI Act represent the world's most ambitious attempt to reassert public authority over private platforms. But even this multilateral muscle has limits. Enforcement actions take years, fines are absorbed as operating costs, and technical workarounds proliferate faster than regulators can respond.
Cassese's remarks at Trento serve as a reminder that the post-1945 international order was built by states that commanded armies, treasuries, and territory. The digital empires of 2026 command code, data, and network effects—assets that cross borders effortlessly and scale exponentially. Whether through global cooperation, regional blocs, or some yet-unimagined institutional form, the challenge for Italy and its European partners is to ensure that democratic values and public accountability remain embedded in the architecture of the digital future.
