When disruptive firms do not comply with existing rules or write their own exemptions because no appropriate rules exist, consumer protection and public safety goals are undermined and incumbent firms still bound by the rules suffer severe competitive disadvantages.
Source quote, verbatim
public policy goals including consumer protection and public safety can be undermined and incumbent firms that continue to be subject to existing rules encounter often severe competitive disadvantages
From
Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016), IV. Disruptive Innovation as a Regulatory Challenge, p. 18 https://ssrn.com/abstract=2740477 · source PDF
Cite as
Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477
Holds when
disruptive products or services that fall outside or evade the existing regulatory framework
Classification
failuresupport: arguedfailure: Regulatory arbitrage by disruptive firmsfamily: regulatory-arbitrageregulatory-failureinnovation
Related claims
restated_bykaal:claim:2808132-010 When disruptive firms do not comply with existing rules or effectively create their own exemptions because the...
extended_bykaal:claim:2808132-011 Incumbent firms facing a perceived threat from disruptive innovation may respond by using the existing regulat...
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