# kaal:claim:2740477-009

**Claim.** 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.

**Type.** failure  **Support.** argued

**Holds when.**

- disruptive products or services that fall outside or evade the existing regulatory framework

**Source quote.**

> 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, page 18

**Cite as.** Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477

**Verify.** sha256 of source PDF `c72871b76fa2ad5a8a69ee8d3defc8f64e624be9052ce763e79cf6c58883f726` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Vermeulen%20-%202016%20-%20Venture%20Capital%20as%20Dynamic%20Regulation%20of%20Disruptive%20Innovation.pdf

**Failure mode.** Regulatory arbitrage by disruptive firms  (family: regulatory-arbitrage)

**Topics.** regulatory-failure, innovation

**Keywords.** regulatory-arbitrage, consumer-protection, competitive-disadvantage, disruptive-innovation

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/2808132-010
- extended_by: https://wulfkaal.github.io/claims/2808132-011

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