# kaal:claim:2808132-010

**Claim.** When disruptive firms do not comply with existing rules or effectively create their own exemptions because the existing framework does not reach them, public policy goals can be undermined and incumbent firms that remain subject to the rules suffer severe competitive disadvantages.

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

**Holds when.**

- disruptive products or services outside existing regulatory categories
- no appropriate replacement rules available

**Source quote.**

> regulatory framework does not apply and appropriate rules are not available, public policy goals can be undermined and incumbent firms that continue to be subject to existing rules encounter often severe competitive disadvantages.70 To counteract such

**From.** Wulf A. Kaal, Erik P.M. Vermeulen, *How to Regulate Disruptive Innovation - From Facts to Data* (2016), III. Disruptive Innovation as a Regulatory Challenge, page 17

**Cite as.** Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132

**Verify.** sha256 of source PDF `3515f2317ed9c1d33ae55d70467cdf1f6c4e350065ea6a887d5d7619599ad7d2` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Vermeulen%20-%202016%20-%20How%20to%20Regulate%20Disruptive%20Innovation%20-%20From%20Facts%20to%20Data.pdf

**Failure mode.** Asymmetric compliance burden  (family: regulatory-arbitrage)

**Topics.** regulatory-failure, economics, compliance

**Keywords.** regulatory-arbitrage, competitive-disadvantage, sharing-economy, public-policy-goals, compliance

**Related claims.**

- restates: https://wulfkaal.github.io/claims/2740477-009

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