Digital trade is crucial for almost every company, but it also introduces new complications. When products or services that contain a computer or can be connected to the internet — which nearly every product or service does — cross borders, cybersecurity risks emerge. Growing concerns that foreign states or corporations can abuse digital products to collect privacy data, plant vulnerabilities, or otherwise cause harm mean that digital products sold across borders are subject to increased scrutiny and controls, and can be targeted for bans — fairly or not — by host governments. Navigating and mitigating these risks needs to be a part of every transnational company’s digitalization strategy.
Failing to properly account for these risks means courting disaster. For instance, Germany banned both the sale and ownership of the U.S.-made voice-activated “My Friend, Cayla” doll in 2017, on the basis that it contained a concealed surveillance device that violated German federal privacy regulations and could be used to spy and collect personal data. Huawei’s 5G equipment has raised concerns that the Chinese government might be able to plant backdoors to…
