When States make private companies their armed wing

Current geopolitical tensions are no longer limited to borders, military alliances or traditional diplomatic relations. On the contrary, they are increasingly manifesting themselves within the structures of the global economy, through supply chains, digital infrastructures, financial networks and cutting-edge technologies including depends on the States. The restrictions imposed by the United States on exports of advanced semiconductors to China clearly illustrate this evolution in the international balance of power¹. By targeting Beijing’s access to critical technologies, Washington no longer relies solely on traditional commercial instruments, but directly mobilizes companies that design, manufacture or control the components now essential to artificial intelligence, high-performance equipment and military capabilities.

This increasing overlap between state interests and private infrastructure goes well beyond the framework of the semiconductor industry. In Ukraine, Starlink satellite systems have taken on such strategic importance that Pentagon signed an agreement with SpaaceX to guarantee the continuity of Ukrainian communications². At the same time, American extraterritorial sanctions show how a State can exert legal and financial pressure on foreign companies operating beyond its own territory³. Thus, multinationals are no longer simple economic players evolving within a relatively autonomous globalized market: they are gradually becoming vectors of power, instruments of coercion and, in certain cases, actors capable of influencing the diplomatic and security balances themselves.

This development today fuels debates on technological sovereignty and strategic autonomy, particularly in Europe, where dependence on infrastructure Foreign assets – whether cloud services, semiconductors or satellite capacity – increasingly appears as a vulnerability as much as a political one than economical⁴. CorÂneÂlia Woll, professor of international political economy at the HerÂtie School and specialist in relations between states, markets and multinationals, is interested in the way in which private companies have become central instruments of contemporary geopolitical rivalries. His research on the extraterritorial scope of American law highlights how multinationals can become, voluntarily or under duress, instruments of power struggles current geopolitics⁵.

In recent years, governments have increasingly called on private companies to achieve their strategic objectives in sectors such as semiconductors, cloud infrastructure, artificial intelligence or energy. Do you think this marks a structural transformation of capitalism, or is it more of a temporary response to geopolitical tensions?

CorÂneÂlia Woll. What is often called “economic diplomacy”, that is to say the use of ecology for the purposes of national security, is not a new phenomenon. States have always used economic instruments as tools of power. Traditionally, conflicts between states were expressed across borders or conventional trade wars based on customs duties. However, today we observe that the interdependence of the global economy has itself become an instrument of state power. Governments rely more and more on businesses, because they control infrastructure, technologies and strategic flows. These can be both national and foreign companies.

There is an extensive literature on what is called “militarized interdependence”, that is, the use of global economic interdependence as a weapon against rivals. This logic is based in particular on two mechanisms. The first concerns bottlenecks, strategic passages capable of paralyzing the world economy. A state controlling an area such as the Strait of Hormuz can exert considerable pressure, as a crucial part of world trade depends on these sea lanes. By controlling these passages, states can obtain political or economic concessions from other actors.

Because companies control energy infrastructure, data systems, critical technologies or semiconductors, they now play a central role in the exercise of state power.

The second mechanism is sometimes called the “pan-optic effect”, that is to say the capacity to monitor global economic flows. Thanks to financial transactions, digital infrastructure or data, certain governments can know who is exchanging with whom and intervene directly in these flows. This allows, for example, the implementation of very targeted sanctions. This logic developed considerably after September 11, when the United States developed tools designed to track financial flows linked to terrorism.

Because companies control energy infrastructure, data systems, critical technologies or semiconductors, they now play a central role in the exercise of state power and inevitably find themselves caught up in current geopolitical tensions. As a result, companies operating in sectors such as semiconductors, energy, infrastructure or data are now deeply involved in conflicts geopolitical, because they have become essential to the exercise of state power.

The United States has used export controls and sanctions to put pressure on companies involved in strategic technologies, particularly those linked to China. How does this modify traditional relations between states and multinationals?

Over the past two decades, and even more so over the past ten years, it has become increasingly clear that states are ready to use strategically multinational corporations because of the role they play in geopolitical competition. My work focuses in particular on corporate criminal law and the way in which it is used extraterritorially to exert pressure on companies. A multinational can be targeted even when it operates outside the territory of the state imposing the sanctions.

For example, if the French bank BNP Paribas, based in Switzerland, maintains commercial relations with Iran, the American government can still sue it under the American legislation. A company that does not cooperate puts its global operations and all its activities in the American market at risk. This is essentially how sanctions work. Governments prohibit companies from doing business with certain countries and threaten them with prosecution if they do. This mechanism already existed in the past, but companies could escape this type of pressure, for example by creating subsidiaries. Today, multinationals know that States can achieve them effectively through legal instruments and financial sanctions.

European politicians often talk about the notion of “strategic autonomy”, even though Europe remains highly dependent on foreign technology companies and industrial infrastructures. Can states truly regain their sovereignty without relying on large private companies?

Strategic autonomy today remains more of an ambition than a reality in Europe. European governments are increasingly recognizing the importance of having their own technology companies, their own satellite systems and supplies energy sources that cannot be easily disrupted by external actors. But achieving strategic autonomy is difficult. One possible approach is to strengthen national or regional companies that governments consider more reliable or easier to influence. Another essential strategy is diversion. When a state depends on a single company for critical infrastructure, such as satellite systems, it becomes vulnerable, regardless of the nationality of that company. If the latter stops cooperating, the problem immediately becomes critical.

Companies are increasingly taking on functions that once fell exclusively under the jurisdiction of states, whether in the areas of cybersecurity, satellite infrastructure, digital payments or even diplomacy. What risks does this create for democratic accountability?

The risk lies precisely in the transfer of essential functions from the State to private actors who are not subject to democratic control. However, I think that it would probably be unrealistic today to imagine that all these activities could be entirely managed solely by public structures, as would perhaps have been the case. was possible several decades ago. Private companies will therefore continue to play a major role, sometimes in partnership with public authorities, sometimes in competition with them. The central challenge is therefore to ensure sufficient diversification and to prevent a single private company from acquiring excessive control over strategic functions of the State. This is directly linked to the broader objective of strategic autonomy.

Some companies today operate simultaneously in several geopolitical blocs and may find themselves faced with conflicting demands from governments. Is this situation tenable in the current geopolitical context?

Operating in several geopolitical regions represents both a risk and a form of protection for multinationals. For business leaders, this geographic diversification helps to reduce exposure to the instability of a particular market. If geopolitical tensions get too bad in one region, businesses can always count on other areas to maintain their activities. However, this situation also raises important questions of democratic accountability, as these companies operate between political systems and competing strategic interests.

In the future, do you think that the growing interweaving between states and companies will strengthen public power or, on the contrary, increase the political influence of big companies on governments?

I prefer to remain optimistic. Today we are seeing increased awareness of the need to monitor and regulate the balance of power between states and businesses, and I see this as a positive development. States remain important players in several of these areas. I am particularly interested in digital currencies and efforts in Europe to maintain regulatory control over future digital payment systems. I think this public involvement is important.

That being said, it is possible that extremely powerful private actors will continue to gain influence, particularly in the technology and data sectors. Since these companies are not politically accountable, states must remain able to regulate these strategic areas. But it remains an ongoing battle, and we will have to see how this balance evolves in the years to come.

Comments collected by Aicha Fall