Soft Law Summit Recap: Industry Self-Regulation Fills the Regulatory Gap

To explore the growing role and potential of industry-led solutions in addressing today’s complex business challenges, BBB National Programs’ Center for Industry Self-Regulation (CISR) recently brought together a diverse group of experts for the second annual Soft Law Summit.  

CISR co-hosted the event in Washington, DC on September 24 in partnership with Arizona State University Sandra Day O’Connor College of Law’s Center for Law, Science, and Innovation. The packed one-day agenda included sessions on the regulation of AI, social media, and protecting children’s privacy and featured speakers who are policymakers, academics, and practitioners across a variety of industries. 

Threaded through the agenda was one key theme: As technology advances at a pace far exceeding the capabilities of traditional governance structures, self-regulation has emerged as a vital tool to complement and support formal regulatory and legal frameworks. 

Gary Marchant of the Arizona State University law school addressed this “pacing” problem and how industries are taking the lead in setting standards, creating codes of conduct, and establishing norms that can reduce the need for formal regulation, offer guidance to government agencies, and, in some cases, transition into “hard law” through agency adoption. 

A key panel discussion focused on how the recent Supreme Court case Loper Bright Enterprises v. Raimondo—which overturned the Chevron doctrine—may further accelerate industry self-regulation.  

The Chevron doctrine required courts to defer to regulatory agencies' interpretations when federal laws were ambiguous. With this shift, Soft Law Summit panelists from the University of Oklahoma, George Washington University, and the American Enterprise Institute agreed that administrative authority is entering a new era of diminished influence, underscoring the need for industries to fill the regulatory gap. Though opinions varied on practical implementation, there was consensus that the governance landscape is evolving significantly. 

Throughout the Summit, several speakers provided examples of successful industry self-regulation initiatives, demonstrating the potential for learning from global practices and the opportunities for leadership at the state level.  

During his session describing a Case Study of Japanese and Singaporean Models for Regulating AI, IBM Policy Lab’s Ryan Hagemann shared how soft law AI governance frameworks implemented by Japanese and Singaporean governments could offer new paradigms for U.S. AI governance. Also discussing AI, The Abundance Institute’s Neil Chilson joined discussants in outlining the potential for nimble soft law frameworks to regulate fast-changing AI, rather than government regulation.  

Demonstrating that agility of soft law, a panel that featured speakers from Boston University, the American Chemistry Council, and George Washington University dissected the chemical industry’s self-regulatory safety standards, how they have evolved and been strengthened over time, and the extent to which they have raised industry performance.  

Meanwhile, a panel exploring modern uses of industry self-regulation in the financial services industry emphasized the importance of raising industry standards beyond the legal minimum to build public trust and encourage broader participation.  

The conversation shifted from industry-specific to state-specific when Reeve Bull, Director of the Virginia Office of Regulatory Management, took the stage to outline Virginia’s innovative cost-savings approach to reducing unnecessary regulations, especially in professional licensing, while still maintaining protections for public health and safety. 

A lively discussion unfolded during a session on the challenges of self-regulation on social media platforms, where public scrutiny and demands for government intervention often clash with First Amendment protections. Nicol Turner-Lee of the Brookings Institution cited the video game rating system as an example of how industry can take the lead in setting effective standards when faced with significant public pressure to do so. 

A session on the Modern Challenges of Protecting Children’s Privacy Online reviewed the various legislative proposals at the state and federal levels, and panelist Ann-Marie Adams of Ithaca College discussed obstacles to parental oversight presented in the digital age, referencing her and Scott Hamula's recent research paper on children and podcasting.  

While much of the discussion focused on these promising examples of how self-regulation can make a difference, there were also concerns expressed by skeptics. Some panelists questioned whether self-regulation is genuinely in the public’s best interest or simply a strategy to forestall formal regulation. The consensus was that for self-regulation to be effective, there must be data and transparency around its implementation. Monitoring and measuring the outcomes of these initiatives will be crucial to demonstrating their public benefit. 

Recognizing this need, with funding from the John Templeton Foundation, CISR recently announced the development of a new soft law curriculum for law, business, and public policy graduate students. This program will feature case studies and provide data-driven insights into best practices for implementing self-regulation, helping to refine and strengthen these programs for future success. 

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