Tech, Regulatory Arbitrage, and Limits

Tech, Regulatory Arbitrage, and Limits

Elizabeth Pollman

Series number :

Serial Number: 
455/2019

Date posted :

June 13 2019

Last revised :

June 13 2019
SSRN Share

Keywords

  • Regulatory Arbitrage • 
  • Technology • 
  • innovation • 
  • regulation • 
  • competition • 
  • social license • 
  • social contract • 
  • social responsibility • 
  • bundling • 
  • innovation cluster • 
  • regulatory entrepreneurship

Regulatory arbitrage refers to structuring activity to take advantage of gaps or differences in regulations or laws. Examples include Facebook modifying its terms and conditions to reduce the exposure of its user data to strict European privacy laws, and Uber and other platform companies organizing their affairs to categorize workers as nonemployees.

This essay explores the constraints and limits on regulatory arbitrage through the lens of the technology industry, known for its adaptiveness and access to strategic resources. Specifically, the essay explores social license and the bundling of laws and resources as constraining forces on regulatory arbitrage, and the legal mismatch that can arise from new business models and innovations as a key area in which the limits of regulatory arbitrage can be observed.

Published in

Published in: 
Publication Title: 
European Business Organization Law Review (Forthcoming)

Authors

Professor
Real name:
Elizabeth Pollman
Loyola Law School, Los Angeles