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Digital Privateering: Cyberattacks as Corporate Legal Risk

Oct 24, 2025UP!

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The era when people said “cybersecurity doesn’t make money” is over. Modern cyberattacks are no longer “once-in-a-century natural disasters” but “foreseeable man-made disasters” that hold executives accountable.

As international cooperation collapses and state-sponsored hackers (APT) and RaaS (Ransomware-as-a-Service) operate as “digital privateers” threatening economic activity, neglecting cybersecurity investment is now a direct path to shareholder derivative litigation.

Therefore, this article explains why modern cyberattacks can be likened to “piracy,” their structural background, and the fiduciary duties that corporate directors must uphold from a legal risk perspective.

The Rise of Habitual Cyberattacks: Pirates and Hackers

Why Cyberattacks Mirror Historical Piracy

Why have cyberattacks become so frequent? Because, structurally, they mirror the pirates of the Age of Exploration. Just as states once gained wealth and dominance through privateers without directly engaging in war, today’s nations exploit non-state hackers to wage “state-sanctioned plunder” in cyberspace.

The Misconception: “Cybersecurity Doesn’t Pay”

Cybersecurity is often said to be unprofitable. However, if it only becomes valuable at the moment of crisis, it resembles the mercenaries who could only survive in wartime. Forgotten in peace but indispensable in crisis — hackers are the digital mercenaries of our era, and that is why I call them “modern pirates.”

Historical Precedent: The Privateers of Empire

During the Age of Exploration, states employed pirates. For instance, Sir Francis Drake, a “crown-sanctioned privateer,” raided Spanish ships and offered his spoils to the monarchy. This form of “state-authorized looting” became the foundation of the British Navy.

I. Structural Parallels: “Legal Void” and “Lawlessness at Sea”

States leveraging irregular forces to accumulate wealth and power without dirtying their own hands is the same pattern we see in state-sponsored hackers today. In essence, just as pirates created their own order in the ungoverned high seas, hackers now rule the unregulated cyberspace.

The Breakdown of International Order: Digital Privateering Returns

(1) Political Aspect: The Rebirth of “Digital Privateer States”

Although international coordination exists formally, real power struggles between nations like China and the U.S. have led states to employ cyber forces as strategic assets.

United States: “Persistent Engagement” Doctrine

The 2018 DoD Cyber Strategy introduced “defend forward,” allowing proactive disruption of adversarial cyber operations at the source. The 2018 NDAA institutionalized this as a legal basis, outlining reporting and authorization for cyber weapons.

(Source: U.S. Cyber Command “CYBER 101”)

China: “Military-Civil Fusion” and Domestic Legislation

Chinese companies are bound by multiple national security laws obligating cooperation with intelligence agencies — a systemic integration of society and state under the banner of “comprehensive national security.”

• National Security Law (2015): Articles 11 and 77 require all organizations and citizens to support and cooperate in safeguarding national security.
• National Intelligence Law (2017): Article 7 mandates all citizens and organizations to “support, assist, and cooperate with” state intelligence work; Article 14 reinforces this duty.
• Cybersecurity Law (2017): Requires network operators to assist in national security reviews and technical inspections.
• Vulnerability Disclosure Regulations (2021): Mandate reporting vulnerabilities to the MIIT within 48 hours.

Russia: “Asymmetric Non-Intervention”

Groups like Conti and REvil, identified by the FBI and CISA, operate from Russian-speaking regions and consistently target Western organizations — notably avoiding domestic targets, implying state tolerance.

(2) Economic Aspect: The War for Data and Supply Chains

Privateering in the Economic Domain

Amid fragmented supply chains, cyberattacks increasingly serve as economic retribution or sanctions. Battles over AI, quantum encryption, and energy networks represent a new “Economic Privateering” era.

1. IP and Data: “Privateering Innovation”
   Targets include AI models, quantum algorithms, and pharmaceutical designs. The goal: eliminate R&D costs and seize de facto standards. Stolen IP is commercialized domestically — stealing another nation’s future growth engine.
2. Supply Chain: “Logistical Privateering”
   Targets include semiconductor and critical mineral logistics. The aim: identify chokepoints and weaponize them in times of conflict or retaliation.
3. Infrastructure: “Privateering Stability”
   Attacks on financial or energy infrastructure seek to induce chaos and economic blackmail.

The Human Dilemma: When Guardians Turn Rogue

The White-Hat Dilemma

White-hat hackers maintain order in cyberspace — the “mercenaries of good.” However, pay disparities and moral ambiguity can lead some to defect.

Causes of Defection

• Moral Misalignment: States, firms, and individuals protect different values.
• Undercompensation: Skills undervalued, little public recognition.
• Identity Split: Anonymity blurs ethical boundaries.

Ethical Gray Zones and Intent

Thus, the line between white and black hats is not defined by “actions” but “intent” — much like the difference between pirates and privateers rested on the existence of a royal charter.

States’ Dependence on Stateless Actors

States also depend on hackers. Just as England tolerated privateers against Spain, modern governments use anonymous attackers for strategic goals. But once control is lost, these agents are purged — feared and dependent in equal measure.

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The Institutionalization of Digital Privateering

From Acts of War to Economic Market

Cyberattacks are no longer “acts of war” but institutionalized “market activities.” The commodification of attacks (e.g., RaaS) marks a loss of state control — echoing how letters of marque once birthed uncontrollable pirates.

1. Strategic Evolution: “Privateering Capitalism”

Historically, letters of marque optimized wartime cost-efficiency but ceded sovereignty to the market. In cyberspace, the same “outsourced plunder” reappears via APTs and RaaS — the digital equivalent of privateering. According to the World Economic Forum, global cybercrime may reach $10.5 trillion annually by 2025.

(Source: WEF “How AI-driven fraud challenges…”)

Historical Analogy

Authorization

Then: Letters of marque → Now: State-backed APTs

Delegation

Then: Ships & crews → Now: RaaS platforms

Economic Incentive

Then: Loot sharing → Now: subscription revenue, affiliate schemes

Loss of Control

Then: Rogue piracy → Now: freelance hacker proliferation

Fatal Flaw

Then: Treason → Now: autonomous economic actors defying state limits

2. Market Evolution: The Productization of Attack

Attack tools are no longer monopolized by nations. Anyone can now outsource cyber offensives through open markets.

Corporate Accountability: From “Act of God” to “Foreseeable Negligence”

The Shift from Natural to Legal Responsibility

In Japan, cyberattacks are still treated as “natural disasters.” Yet repeated attacks are foreseeable man-made disasters. The first breach may be unavoidable, but the second is negligence.

1. Legal Basis: Directors’ Fiduciary Duty

Under Japan’s Companies Act (Art. 330) and Civil Code (Art. 644), directors owe a duty of care as prudent managers. “Doing one’s best” is insufficient.

2. Proof of Foreseeability and Avoidability

• Industry-level foreseeability: Prior attacks on peers show clear risk awareness obligations.
• Internal signs: Ignoring phishing upticks or minor breaches strengthens negligence claims.

3. The Fukushima Case Analogy

In the TEPCO shareholder lawsuit, directors were found liable for failing to act despite foreseeable tsunami risks. Similarly, failing to anticipate and defend against systemic cyber threats exposes executives to comparable fiduciary scrutiny.

Conclusion: Cybersecurity as “Trust Capital”

Cyber threats will not diminish. Because geopolitical fragmentation is becoming institutionalized, companies that underinvest in defense will lose not only data but market trust.

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