Just because you can, doesn’t mean you should


A great example of doing things that you can do, but really shouldn’t, is the old days of telemarketing. A multi-million dollar industry was essentially regulated out of existence because of harassing phone calls interrupting families having dinner. There was no law preventing those phone calls, but an industry out of control and not in step with public and regulator thinking is going to have costly regulations imposed on it.

A more recent example is private banking. After helping citizens avoid the tax laws of their home countries for years, governments are beginning to crack down. It’s win win for governments because: the behavior is criminal, seizures enhance revenue generation, the public loves it and it’s great publicity for governments. Laws similar to FATCA are being passed in many jurisdictions. Up to 50% of funds in private banks may be undeclared.

Private banking should have seen this coming with the financial crisis and populist sentiment against bankers and the rich.

Globally, online behavioral tracking is an example of an area where regulation is coming as the regulation of data brokers in the US. Poor self-regulation results in costly, government imposed regulation. Doing the right thing is often cheaper in the long run.

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