From the Eurodollar to the Splinternet: How the Race to Regulate the World Broke It
“History does not repeat itself, but it often rhymes.”
“You cannot solve an exponential complexity problem with linear bureaucracy.”
“Power tends to corrupt, and absolute power corrupts absolutely.”
I grew up in a house where reading was not optional. Being dyslexic, dysgraphic, and dysnumeric made it painful, but my parents had a simple rule: read, explain, defend. No written reports. Just me, standing there, trying to make sense of something complicated. One of the books they handed me was Plato’s Republic. What stayed with me was not the philosophy. It was the realization that people have been struggling to govern complexity for thousands of years. The names of the problems change, but the core tension between power, understanding, and human nature does not.
That early lesson was not about Plato. It was about learning how to think. And it is why the unraveling of the global internet feels so familiar. We built something wildly complex, assumed it would stay coherent, and then stopped paying attention to whether anyone still understood how it worked.
For a long time, growth hid the cracks. It looked like the system might harmonize on its own.
How it started
There was a stretch from the early 2000s to the mid-2010s when the internet felt weightless. Borders mattered less. Companies operated everywhere at once. We acted as if we had finally built a global commons.
But the system only worked because the cracks had not widened yet. Growth covered sins. Neutrality was taken for granted. Enforcement was sparse. And most governments did not yet understand the power they were holding.
Once they did, everything changed.
Where the cracks first appeared
If you want to understand the present, imagine a marketplace in Lyon around the year 600.
A Roman trader sells a diseased cow to a Gothic warrior. A dispute erupts. Which rules apply? Roman law? Gothic law? Salic law? The merchant across the stall follows a different code entirely.
Nothing works because everything overlaps.
That world did not collapse from stupidity. It collapsed because complexity made ordinary life too brittle. People retreated into smaller circles with clearer rules.
Today, a single smartphone tap in Brazil may be governed by US law because the data touched a server in Virginia, EU law because a European might use the service, Brazilian law because the user is in Brazil, and sometimes Chinese or Indian law depending on where the packets travel.
One action. Four sovereigns. Zero clarity.
When history repeated itself
Europe solved this once already. In 1648, after decades of war, it settled on a blunt rule: your authority ends at your border.
It was not wise. It was not elegant. It was enough.
Trade flourished. Science accelerated. Industry emerged. A patchwork of boundaries replaced the chaos of overlapping claims.
The internet quietly tossed that lesson aside. When data crossed your border, you assumed your rules crossed with it. If a foreign company touched your citizens, you claimed jurisdiction over it. Everyone became a king claiming the same territory.
This worked until it did not.
Power learns to travel
For centuries, strong states found ways to project authority outward. The tactics changed, but the impulse remained. Merchants judged under their own laws abroad. Empires exporting their courts. The United States using market access to enforce its rules. The dollar turning sanctions into global tools. GDPR and the CLOUD Act pulling data into competing gravitational fields.
Eventually the boomerang returned. China, Russia, India, Brazil, Nigeria, Turkey, and others built their own outward-facing systems.
Everyone learned the trick. Everyone decided to use it.
We even see the revival of cultural jurisdiction. Putin claims authority wherever Russian speakers live. Western regulators now claim authority wherever their citizens’ data flows. Jurisdiction is no longer about where you are. It is about who you are and what language you speak. It is a formula for endless conflict.
The hidden glue that held globalization together
Globalization did not succeed because nations resolved their differences. It succeeded because they tolerated spaces where the rules did not apply cleanly.
Eurodollar markets. The early internet. Loose data practices. Informal restraint.
These buffers allowed incompatible systems to trade without resolving contradictions. When governments realized they could weaponize cloud providers, app stores, and platforms, the restraint vanished. The buffers collapsed. The contradictions rushed in.
The quiet expansion of authority
Governments rarely ask for power directly. They cite terrorism, child protection, organized crime, money laundering. The public nods. The tools are built.
And the uses expand.
A system designed to track extremists becomes a system used for tax compliance. A privacy rule becomes a lever for geopolitical influence. A regulation meant to protect users becomes a tool to pressure foreign companies.
The shift also targets citizens. Under laws like the UK Online Safety Act, platforms must scan for harmful content, while older public order laws are used to arrest individuals for what they write. The platform becomes the informant. The citizen becomes the suspect.
This ignores a simple reality. A forum is not a corporate broadcast. It is an aggregate conversation. When you treat a forum like a publication, you do not just fine a company. You criminalize the people using it.
No one announces the shift. It simply arrives.
The traveler’s trap
This expansion destroys the concept of safe passage. In the old world, if I wrote a pamphlet in Ohio, I was subject to Ohio law. If I traveled to Germany, I followed German law while in Germany.
The internet erases that distinction. Regulators now argue that if my post in Ohio is visible in Germany, it is subject to German law.
Where does that end? We see visitors to Turkey detained for content that offends local authorities. Tourists in Dubai face jail time for reviews written at home. If I criticize a monarch in an American forum, can I be arrested during a layover in the UAE years later?
If jurisdiction follows the data, every traveler walks through a minefield of laws they never consented to and cannot vote on.
Regulatory colonialism
Europe did not win the platform wars, but it mastered administration. GDPR, the DMA, the DSA, and the AI Act form a regulatory architecture that shapes global behavior by raising compliance costs.
There is an economic lie buried here. Regulators claim they are policing Big Tech, not individuals. But if you fine a company for carrying my speech, you are placing a tariff on my words. It is protectionism masquerading as safety. You are taxing the import of ideas you cannot compete with.
To be clear, not all of this is wrong. The United States needs a federal privacy law. GDPR got the big picture right: data rights are human rights. But the implementation covered the open web in the digital graffiti of cookie banners. It is a global pixel tax that wastes millions of hours while solving nothing.
The problem is not the desire to regulate. The problem is the arrogance of applying your local preferences—good, bad, or merely annoying—to the entire planet without consent.
We would never allow a foreign court to cut the phone line of a citizen in Ohio because their conversation violated a speech rule in Paris. Yet we accept that logic when the conversation happens on a server.
True governance requires consent. A mutual treaty is legitimate. A company operating on your soil is legitimate. But when a regulator bypasses a foreign government to police a foreign citizen directly, it breaks the compact between a citizen and their own state.
It comes down to standing. If my own government overreaches, I have recourse. If a foreign regulator erases my content, I have no voice and no remedy. That is not law. That is subjugation.
When politics becomes math
Up to this point the problem looks political. Now it becomes mathematical.
If only a few jurisdictions make rules, contradictions are rare. If dozens do, contradictions are certain. The number of potential conflicts rises faster than any human institution can track.
You get impossible requirements where one state demands disclosure and another forbids it.
No optimization fixes a logical impossibility. Not with lawyers. Not with AI.
This also creates a global heckler’s veto. If 195 countries all enforce their local laws globally, the cost of compliance destroys the platform in its own home market. Foreign censorship does not just silence me abroad. It destroys the tools I use at home.
If the UK wants to weaken encryption for its own citizens, that is its choice. But it cannot demand that a global platform weaken encryption for everyone else.
When the cost of compliance becomes an existential threat, the only option is to leave.
Google left China. Meta and Apple withheld advanced AI models from Europe. Apple went further: threatening in 2023 to pull iMessage entirely, and in 2025, disabling Advanced Data Protection for British users rather than breaking encryption.
It is no longer a negotiation tactic. It is a strategy.
This is how the Splinternet arrives. As Hemingway wrote about bankruptcy, it happens two ways: “Gradually, then suddenly.”
Rules that refuse to settle
Some laws require removal of harmful content in hours. But the definitions shift constantly. A system cannot stabilize if the rules never settle.
Platforms chase the strictest interpretation of the broadest rule from the most aggressive regulator. That is not governance. It is noise.
A world dividing into stacks
The internet is not collapsing. It is dividing into spheres. A Western stack. A Chinese stack. A European regulatory arc. An Indian sphere rising quickly.
They will touch at the edges but will not integrate. Companies will build parallel products. Users will move between digital worlds the way people in Belarus once carried two SIM cards because no single system works everywhere.
This leads to hard realities. China will have a Chinese internet. North Korea will have a hermit intranet. Western observers may see rights violations. But in a sovereign world, the ultimate check on digital power is the physical right to leave.
The moral line is not whether a firewall exists. It is whether the citizen can walk away from behind it.
The Eurodollar paradox
I do not welcome this fracture. I spent a career building systems meant to bridge these gaps, arguing that a unified network is more resilient than a divided one. The Splinternet is fragile. It is inefficient. It is a retreat.
But we must acknowledge what held the old world together.
It was not global government. It was interoperability without permission.
The Eurodollar was the archetype. Dollars held in banks outside the United States, beyond direct regulation. Messy. Uncomfortable. Essential. It kept the global economy moving.
The early internet played the same role. A neutral zone where data could flow even when nations disagreed.
We are dismantling that neutral zone. We are replacing interoperability without permission with compliance by permission.
We may gain sovereignty. But we are destroying the mechanism that allowed a divided world to function as one.
The GRANITE shift
There is one final signal of how far the pendulum has swung. Jurisdictions like Wyoming have begun experimenting with laws such as the GRANITE Act, which create penalties for complying with certain foreign mandates. It is a poison pill strategy. If adopted widely, it would make it illegal for a company to obey another country’s extraterritorial demands.
The meaning is clear. The era of a single global ruleset is ending. Regions are not just drifting apart. They are beginning to defend the separation.
The conclusion most people avoid
We did not lose a shared internet because of malice. We lost it because the assumptions behind it stopped being true. The system became too interconnected for local rules to govern and too political for global rules to be accepted.
What comes next will not be universal or seamless or even fair.
But it will be stable.
Sometimes the only way to solve an impossible equation is to stop pretending there is a single answer.
