Numerous corporations, ranging from Airbnb to Tesla, and from DraftKings to Uber, have built huge businesses that reside in legal gray areas. Instead of taking the law as a given, these companies have become agents of legal change, focusing major parts of their business plans on changing the law. To achieve their political goals, these companies employ conventional lobbying techniques, but also more innovative tactics. In particular, some attempt to enter markets quickly, then grow too big to ban before regulators can respond. If regulators do take aim at them, they respond by mobilizing their users for political support. This Article offers the first focused study of what we term regulatory entrepreneurship — entering a line of business in which changing the law is a significant part of the business plan. We provide a framework for understanding this combination of business and political activity and a detailed account of the techniques that these companies employ. Further, the Article identifies and considers the conditions that are most likely to foster regulatory entrepreneurship, the prospects for regulatory entrepreneurship going forward, and its likely positive and negative implications for lawmaking.
Barry, Jordan M. and Pollman, Elizabeth, Regulatory Entrepreneurship (March 3, 2016). Southern California Law Review, Vol. 90, 2017 Forthcoming.