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They have assumed the position of
the legislator through clever combi-
nations and synergies among several
intellectual property rights patents,
combining them to an effective weap-
on against other industry participants,
securing their own position and not
limited to securing the profits and
benefits from their creations. Such
behavior, primarily anti-competitive
and only secondarily profit-motivated
had already previously been an issue
in Microsoft securing its own position
beyond what had been solely possible
through marketing. (For a compre-
hensive treatment of this particular
attitude on the part of CITI firms see
the work of Lawrence Lessig, 1999,
2001 as well as Van Waarden, 2001)
sures to make the legal environment gravi-
tate towards them. We suggest that regu-
latory opportunism prompts those firms to
perceive regulatory vacuum as legally tur-
bulent and therefore as a potential source
of growth for the firm responding affirma-
tively to absorb the inefficacies as a result
of absent regulation.
the conflict With respect
to social position
Complex Information Technology-Intensive firms
initially campaigned on a platform of social value
creation. Their purpose and reason for existence
was the disproportionate generation of social value
far above and beyond the residual private profit
that they would also generate. They conveniently
deemphasized the fact that their legal configuration
was very much for-profit. They claimed to be able
to meet an even exceed not-for-profit aspirations
with formal for-profit structures.
In the financially constrained pos-recessionary
world for patient capital formation this is a par-
ticularly tempting and attractive model because
of its sustainability and capacity. Compared to
the difficult and discretionary and opaque charity,
donor, and public funding model, and the restric-
tive earned income strategy, in the for-profit mode,
the private sector can be tapped consistently for
its wealth and transparency is easier to come by
through equity positions of funders.
But while this may seem very compelling from
the point of view of financing it is questionable
if not objectionable in terms of the redistribu-
tive effects between the different constituencies
involved. Such models indeed equate to a form
of taxation: make the marketers pay for the home
users' benefits of a search engine, for example. The
critique here is not with respect to the ingenious
model itself, it is with respect to its unchecked
consequences. These activities, while undoubt-
edly beneficial to all parties involved sidestep
the original authority for such redistribution, the
◦
This last example also demonstrates
the ingenuity of the CITI firm to in-
crease effectiveness of their qua-
si-regulatory ambitions through a
layered approach, synergistically le-
veraging a composite of all three reg-
ulatory strategies including the one of
regulatory opportunism (c below).
•
Finally, it its least intense form, the posture
of firms is that of regulatory opportunism,
i.e. the deliberate, intentional and preemp-
tive occupation of yet unregulated space
via the creation of
de facto
regulation and
near-binding proprietary standards. With
regulatory opportunism we are addressing
the proclivity of CITI firms to fill regula-
tory vacuum resulting from intentional and
explicit regulatory forbearance. Analogous
to the construct of technological opportun-
ism (Srinivasan et al., 2002), we propose
that in a more benign and docile posture
these CITI firms hone their law-sensing
and law-response capabilities in the light
of changes and turbulence in their legal
environment and are likely to create pres-
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