# What is chilling effect? ChatGPT Imagine you're in a playground and you want to climb a tree. But you see a sign that says, "If you climb trees and fall, your parents will have to pay a big fine." Even if you're really careful and good at climbing, you and your friends might decide not to climb any trees because you're scared of the fine. That's kind of like the regulatory chilling effect. In the grown-up world, countries sometimes want to make new rules to protect people, like making cigarette packs plain so fewer people will smoke. But if a big company can take a country to court for making these rules and the country might have to pay a lot of money, the country might get scared to make new rules. Even if the country thinks it's a good and important rule, they might not do it because they're worried about having to pay a lot of money. This fear that stops them from making new rules is called the "regulatory chilling effect". It's like being too scared to climb the tree because of the fine. Q: But if I don't fall, my parents will not pay? A: Yes, exactly! In your playground example, if you climb the tree and don't fall, then your parents won't have to pay the fine. The sign is there to warn you about what could happen, but if you're careful and nothing bad happens, there's no fine. This is similar to how countries think about making new rules. ==They might be worried about getting into trouble (like paying a lot of money) if a big company doesn't like the new rule. But if they make a good rule and can defend it well, they might not have to face any bad consequences.== The challenge for the countries is deciding whether it's worth the risk to make the new rule, even if they believe it's the right thing to do.