Regulatory Sandbox: Bridging the Gaps by Designing a Dispute Resolution System

ABSTRACT Regulatory sandboxes have emerged in numerous countries, offering a controlled environment for testing digital technology‐based business models or services within real markets. During these testing phases, innovators benefit from regulatory relaxations, which sometimes may lead to conflicts and disputes. Consequently, a need arises for swift and expert dispute resolution mechanisms to mitigate the negative impacts of such conflicts. However, a notable gap exists in the regulatory framework: many sandbox‐related regulations worldwide lack provisions for dispute resolution. This paper addresses this gap by proposing an efficient dispute resolution model for conflicts arising during experimentation within regulatory sandboxes. Employing a comparative legal method, the study compares national regulations pertaining to regulatory sandboxes and their practical application and utilizes a systemic approach alongside legal modeling to devise a model for efficient dispute resolution. The proposed model is designed to ensure prompt and competent resolution of disputes arising from experimentation. By offering this model, the study contributes to the limited literature on sandbox disputes and their resolution within the experimental regulatory framework.