Self‐Regulatory Trajectories in the Shadow of Public Power: Resolving Digital Dilemmas in Europe and the United States

Although industry self‐regulation has developed into a preferred regulatory strategy for the digital economy, self‐regulatory solutions adopted in the U.S. and the European Union differ considerably. We argue that variation in the shadow of public power—the public sector tools employed to induce industry collective action—sets the two on distinct self‐regulatory trajectories. Legalistic self‐regulation dominates in the U.S. and coordinated self‐regulation in Europe. Expectations derived from the model are evaluated in case studies of online content regulation and personal data privacy protection.