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European Tech Analysis

“The Problem with Regulation”

Posted on 15. February 2016 Written by Marcel Weiss

Ben Thompson at Stratechery:

Regulations are one of the most effective moats incumbents have because they already have the infrastructure and revenue streams to deal with them

Regulatory capture, in which incumbents have overdo influence on what the regulations actually say and do, is very much a real thing and inevitable the longer a regulation is on the books

Politicians and regulators respond to political pressure, which comes from mobilized constituents; this, by extension, requires an actual product providing actual consumer benefit, not a powerpoint presentation

We are living in a time when technologies like the smartphone and the Internet are fundamentally changing what is possible, what is dangerous (or not), and incumbents in industries everywhere are threatened and heavily incentivized to exercise their influence on governments struggling to keep up with the pace of change. The last thing we need is companies voluntarily tying their own hands about something that is “right” simply because it’s legally gray.

But, on the flip side, regulatory risk is a real thing, and companies operating in this area must have more judgement and better execution and only choose battles worth fighting.

Spot on.

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Analysis and links to articles on the big picture of the tech industry and the networked information economy.

Author: Marcel Weiss is a writer, consultant and fighter for pareto-optima. He is thinking and linking from Berlin, Germany.

contact: marcel@neunetz.com

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