Regulatory Friction as a Major Roadblock for Start-ups: How Business Lawyers can Help

At the end of 2021, the VC firm Atomico reported record-breaking levels of investment in Europe with a growing number of unicorns and high levels of start-up activity comparable to the U.S. However, a growing threat to the European innovation project is regulation. Stripe has recently reported that more than half of the European start-ups surveyed said the time spent on compliance processes is the greatest threat to their business. According to a new Stripe report, one out of three start-ups has considered starting their business outside of Europe due to the level of regulatory obligations and compliance issues. 
The wave of regulation is not limited to Europe alone. Since 2020, the Canada has subjected all automated decision making systems delivered to the government to algorithmic impact assessments. In 2022, New York City  passed a law requiring companies providing AI that helps make hiring decisions to obtain “bias audits” of their technology. The District of Columbia may pass a bill  that would force entities using algorithmic tools to determine employment, housing or loan eligibility to disclose the algorithms and the data used to train them and be audited. The Federal Trade Commission and a number of Congressmen want to hold companies responsible for harm and discrimination caused by AI systems. 
The joint session between the IT and Start up Commissions will examine the implications for start-ups worldwide of the recent European legislation, including the GDPR, the Digital Markets Act and the proposed Artificial Intelligence Act which not only have extra-territorial reach but also aim to be the gold standard for regulation to be emulated worldwide. The session will also examine regulatory developments in the U.S, China and other jurisdictions. The session will also examine opportunities for start-ups created by the wave of regulation, and how business lawyers can help navigate the regulatory mine field.