Actually the free world is all non-Communist countries. It's a propaganda term invented by the west (literally they were interchangeable, "free world" and "western world"). You can still see this influence as the use of the phrase "the leader of the free world" is exclusively held for the President of the United States.

The "free world" as a broader idea is still kind of useless in the modern world. Your government may not have made end-to-end encryption illegal (yet) but as private corporations actually run everything that people use, they get to impose their own will and determine your practical "freedom". There's no law preventing Apple from changing its encryption technology.