Let’s unpack each one of them.<\/p>\n
1. Overzealous regulation<\/strong><\/p>\n “Compliant innovation” is an oxymoron but regulators keep trying to enforce it via ex ante<\/em> regulation.<\/p>\n This curbs innovation. To take an example, if all the extant rules on two factor authentication for online payments<\/a> had applied to UPI ex ante<\/em>, it’d have been as painful to make a UPI payment as an NEFT or IMPS payment, and UPI would’ve been dead on arrival.<\/p>\n It’s not only me. A recent oped entitled Curb Your Enthusiasm<\/strong><\/a> in the Economic Times<\/em> echoes my take.<\/p>\n Fans of ex ante<\/em> regulation counter this by arguing that it takes time for ex post<\/em> regulation to be enacted, by which time industry players could become “too big to be regulated<\/em>“.<\/p>\n They’re not entirely wrong. In the absence of ex ante<\/em> regulation,\u00a0Epharmacy<\/strong> <\/em>and Bikeshare<\/em> <\/strong>followed the regulatory entrepreneurship playbook and leveraged regulatory gaps.<\/p>\n \u201cRegulatory Gap\u201d is something that lies in the twilight zone between \u201cNot Legal\u201d and \u201cNot Illegal\u201d, two terms that are interpreted by regulatory entrepreneurs thusly:<\/p>\n In other words, Regulatory Gap is something that\u2019s neither permitted nor banned by law<\/strong><\/em>.<\/p>\n – Fintechs Need Marketers And Lobbyists \u2013 Not Lawyers<\/a><\/p>\n<\/div>\n<\/blockquote>\n According to news<\/a> reports<\/a>, startups don’t have the required licenses for epharmacy and bikeshare despite operating them for over five years, and frequently get into tussles with pharma regulator and brick-and-mortar chemist shops, and transport regulators and auto rickshaw unions respectively, even to this day. But they’ve become unicorns and decacorns by now, which reflects the limitations of ex post<\/em> regulation.<\/p>\n However, that’s not enough reason to be overzealous with regulation because ex ante<\/em> regulation would’ve nipped these startups in the bud, cutting off the humongous value they created for their investors, founders, employees, and suppliers. In my opinion, regulators can curb the risk of these startups going rogue by conducting periodic reviews of their operations vis-a-vis shifting market conditions.<\/p>\n Thankfully, the Indian courts of law have reversed several overzealous regulatory actions e.g. CCI v. Amazon, SEBI v. NSE CoLo, CCI v. Grasim.<\/p>\n “Supreme Court scrapped \u20b9202 CR penalty on Amazon and told CCI to refund the amount”. \u2014 SKR (@s_ketharaman) July 18, 2026<\/a><\/p><\/blockquote>\n![\"\"](\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2026\/05\/maverick-innovation-ban.jpg\")
<\/a>Compliance is “staying in the box”.\u00a0Innovation is “going out of the box”. By definition, they’re pointed in opposite directions.<\/p>\n\n
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\nNice to see the courts quashing yet another case of overzealous regulation \/ enforcement. Just because innovation is not understood doesn’t mean it’s a scam.
\nSEBI v. Jane Street. NSE CoLo.<\/p>\n