Tech, Regulatory Arbitrage, and Limits

47 Pages Posted: 31 May 2019 Last revised: 13 Nov 2019

See all articles by Elizabeth Pollman

Elizabeth Pollman

University of Pennsylvania Carey Law School; Co-Director, University of Pennsylvania Carey Law School - Institute for Law and Economics; European Corporate Governance Institute

Date Written: May 24, 2019

Abstract

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 non-employees. 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.

Keywords: regulatory arbitrage, technology, innovation, regulation, competition, social license, social contract, social responsibility, bundling, innovation cluster, regulatory entrepreneurship

JEL Classification: K2, K4, L5

Suggested Citation

Pollman, Elizabeth, Tech, Regulatory Arbitrage, and Limits (May 24, 2019). 20 Eur. Bus. Org. L. Rev. 567 (2019), European Corporate Governance Institute (ECGI) - Law Working Paper No. 455/2019, Loyola Law School, Los Angeles Legal Studies Research Paper No. 2019-16, Available at SSRN: https://ssrn.com/abstract=3393288

Elizabeth Pollman (Contact Author)

University of Pennsylvania Carey Law School; Co-Director, University of Pennsylvania Carey Law School - Institute for Law and Economics; European Corporate Governance Institute ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States

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