Regulation of Startups and E-Commerce: Legal Challenges and Gaps

Abstract

The rapid proliferation of startup enterprises and e-commerce platforms has fundamentally challenged traditional regulatory frameworks, creating significant legal gaps that threaten market stability and consumer protection. This paper examines the primary regulatory deficiencies governing digital commerce and emerging business models through doctrinal legal analysis and comparative examination of international approaches. The research reveals that existing legal structures, designed for brick-and-mortar commerce, fail to address the unique characteristics of digital platforms, cross-border transactions, and data-driven business models. Key findings indicate that regulatory gaps in liability frameworks, data protection, taxation, and consumer protection create systemic risks while potentially stifling innovation. The analysis demonstrates that jurisdictional fragmentation, technological complexity, and regulatory lag significantly impede effective governance of digital commerce. This study contributes to legal scholarship by identifying specific areas requiring legislative intervention and proposing a framework for adaptive regulation that balances innovation incentives with consumer protection imperatives.