Uber is a prime example: The competing system, the taxi, is very old, with the first horse-drawn hackney carriages going back to the 17th century. Thus already in 1635 the Hackney Carriage Act was passed by Parliament in the UK. Pretty much every country in the world has regulation on taxis, and quite often individual cities have addition rules and regulation. Regulations are usually designed to protect somebody: Either the customer, or the taxi driver, or the general public. Cities want some balance between transport being available, affordable prices for customers, living wages for taxi drivers, and minimization of nuisance from taxis taking up space on the roads and parking around tourist spots. In many cases, Uber was able at least for some time to be a lot cheaper than taxi services, by simply not having to follow all of those rules. That meant bigger profit for the company, which enabled them to offer lower fares to customers, thus winning market share. On the other side, the drivers were often worse off than regulated taxi drivers. Uber is an interesting example here, because they are already 15 years old: Uber disrupted many markets, but then over time the backlash appeared; both the competing taxi services and the exploited Uber drivers protested, and in many cases the regulatory authorities caught up with Uber and forced them to play by the same rules as taxis, wiping out their regulatory advantage. Due to there being so many different local markets, the fight is far from over, but the general direction is obvious: Regulatory advantage is temporary, and the long-term future of a service like Uber is looking more and more like any other driving service.

A slightly different case, and somewhat more worrying, is a different regulatory advantage: Deliberate non-compliance with rules and regulations. Usually that works like this: The big new tech company claims to be only a platform, handing over all legal responsibility to a huge number of sub-contractors. The subcontractors systematically break the law, but the platform claims it can't be held responsible for that. And because the law-breaking happens at such a huge scale, enabled by the platform, the authorities don't have the manpower to stop the law-breaking. A typical example is AirBnB. In many countries and cities there are rules in place that allow small-scale holiday rentals for a limited amount of days per year. On AirBnB there are a huge number of holiday rentals available that break this rule, and which are illegally available 365 days per year as holiday rentals. Also some people have many apartments on AirBnB, although in many places that is illegal too. The platform benefits from its subcontractors breaking the law, but claims they didn't know anything about their non-compliance. That makes it very hard for authorities to enforce the law, because they need to pursue many individuals instead of one big company.

The one big brewing storm where a platform is profiting from both regulatory advantage and subcontractor cheating are companies like Temu and Shein. On the one side, they have identified a legal loophole, the "de minimis" shipment exception: A parcel sent directly to a consumer is legally avoiding duties, as long as its value is below the local de minimis threshold value. Here in Belgium this threshold is €150, while in the USA the threshold is $800. On the other side, since this loophole is being widely exploited, there are now over 10 million of such parcels *per day* arriving in Europe, and similar numbers in the USA. It is extremely easy to either split up an order from a customer that is over the de minimis value into several parcels, or to simply lie about the value. Spot checks have revealed that two thirds of all parcels from China to Europe under-declared their value. The US has the world's largest customs and border protection agency with 60,000 employees, but even if they all worked all day to open every parcel arriving from China to the US and check its contents, they wouldn't be able to manage that task.

At first that sounds great for consumers: Cheap goods from China to survive the cost-of-living crisis, unaffected by tariffs, duties, or taxes. Unfortunately many of these parcels also contain goods that aren't compliant with a lot of safety rules. A Chinese producer of let's say electric goods can easily fake the US or EU markings on his goods that tell the customer that this product is safe, and then when the coffee machine or power strip melts down and causes a fire, it is impossible to get redress. There are tons of horror stories of all sorts of defective goods from China, for example children's toys containing harmful heavy metals in their paints. That is not to say that everything produced in China is garbage, but that this specific business-to-consumer direct shipping via platforms like Temu and Shein is extremely susceptible to all sorts of fraud.

Both regulatory advantage and downright fraud tend to be short-term business models. Authorities catch up. Especially when like in this case there are billions of dollars of evaded duties and taxes on the line. Both the US and Europe are already considering dropping the de minimis shipping exception. Trump would be furious if he ever found out that his beloved tariffs on the Chinese aren't actually paid in billions of cases.

In the end, Temu might simply be *too* successful. The charade that a platform is in no way legally responsible for the malfaisance of the thousands of subcontractors using the platform might not last forever. If US or European authorities today discover one case of fraud, they can contact Temu; Temu will gladly remove the subcontractor in question from their platform, and the very next day the exactly same item will reappear under a different company name on Temu again. Making the platform responsible instead of having to check each individual parcel is the only possible way. The main reason that lawmakers hesitate to change the rules is that it would not only affect Chinese companies. Amazon would hate it if they were responsible for the compliance of every item on their platform. And who knows how many other US tech companies succeed in creative destruction and disruption of markets only because they can legally avoid regulatory compliance.