Regulating with data

1. Enabling Regulatory Innovation by Using Data
Marco Torregrossa
Managing Director @ European Sharing Economy Coalition
Secretary General @ European Forum of Independent Professionals
European Commission DG Grow - 12 July 2016

2. Regulatory Tension: Similar Pattern
1. New platform creates an innovation that breaks old rules
2. New platform ignores those rules until they have grown a
critical mass of users
3. Lawmakers and incumbents respond by trying to shut down
the platform
4. Platforms and their happy users complain with the lawmakers
5. A small amount of data is shared to settle the dispute
6. Repeat

3. How Governments Regulate Platforms
Traditional regulatory model -> the one government uses to
regulate the private sector focuses on up-front permission.
Why? -> When regulations were conceived, policymakers didn’t
have access to computer generated real-time data. The only
feasible approach was to build high barriers to entry.

4. Source: Nick Grossman, @nickgrossman

5. How Platforms Regulate Themselves
Platforms are regulatory engines in their own rights -> This is
based on data-driven accountability.
Example -> Uber drivers can get kicked out of the platform for
poor ratings, very quickly.

6. Source: Nick Grossman, @nickgrossman

7. How Governments Should Regulate Platforms
Regulatory innovation by using data -> Grant platforms the
freedom they grant their users, but also enforce the same data-
driven accountability.
Examples -> Airbnb collects tax for local authorities in
Amsterdam. Google predicts flu outbreaks for the Center for
Disease Control using data collected from searches. Airmap
collects real-time drones information for air safety authorities.

8. Source: Nick Grossman, @nickgrossman

9. New Ways of Trust: Sharing the Data
• Tons of data is generated by our phones, our homes, our
computers, our cars etc.
• Platforms have been mining large sets of data trails users
provide with their digital interactions to generate insights of
business and social importance.
• Governments need data to regulate effectively and ensure
safety, security, health. There are answers inside the data!
• Platforms systematically hand over anonymized (but
audited!) data to governments, who can use it to regulate.
• Platforms build credibility with regulators, ensure compliance
with a set of laws and enact transparency with users.

10. 1. Lawmakers need to make it less hard for platforms to get
started (e.g. lower barriers to entry, relax licensing
requirements, increase the freedom to operate).
-> This is crucial for experimentation and innovation.
2. In exchange for that freedom, platforms need to share data
with regulators in real time, just like their users do with
them.
-> They will need to accept that data may result in forms of
accountability (e.g. Uber could be making NYC traffic worse
and Airbnb could be making SF housing affordability worse).
Final Takeaways

11. Marco Torregrossa
http://about.me/marcotorregrossa
@EuroFreelancers | #SharingEconomy| #CollEcon

12. Nick Grossman, Union Square Ventures: Here’s the solution to
the Uber and Airbnb problems — and no one will like it, 23
July 2015
Arun Sundararajan, Professor of business at New York
University: What Governments Can Learn From Airbnb And
the Sharing Economy, 12 July 2016
Sources