The tighter that regulations squeeze on free-enterprise, the more free-enterprise "fights back" by doing stuff like this. It's the path of least-resistance and the most-profit so of course it'll get exploited.
Essentially, though -- this is just "more regulation with extra steps."
Just pass the regulations and competition will likely find a way around it. Honestly, this to me is the biggest blind spot in all of "pro free market capitalism." The good flavor of capitalism is antifragile, You can make competition better precisely by making things HARDER on private companies, not easier. Stuff gets better because the weak die.
It such regulation comes, it will be taking away freedom to take away freedom from the free market. Interesting concept, and interesting mental gymnastics will be done.
> It's a known practice of larger corporations to promote regulations that take them little effort to adhere to. However, those same regulations raise the bar for startups to gain entry and compete in an industry. Ironically enough, it's the regulations themselves that become anti-competitive.
This point about "regulatory capture" is a often brought up as a clever anti-regulation/free market parry, to create a demotivating feeling of "damned if you do, damned if you don't" that breaks in the free marketeers' favor.
I think the rhetorical tactic only really works if you look at part of the problem in isolation, and it's eliminated or at least mitigated with the consideration of action in other areas (e.g. more aggressive anti-trust/pro-competition regulation, or the kind of oversight regulated monopolies get).
Regulation is also vulnerable to abuse. The naive “solution” to that is more regulation. This is great for successful incumbents since it raises barriers to entry for potential competitors.
There will always be competition for resources. It’s my observation that every proposal to eliminate that coincidentally allocates more resources to the proposer or a group he identifies with.
Laissez-faire is no exception. In fact I’ve never heard of one.
This is the thing that needs to be regulated. It will force these companies to spend actual money on stuff. they’ll be still insanely profitable but not able to run quasi monopolies on infrastructure and extract all profits while externalising all the damage.
That may be the intent of regulation but what ends up happening is that companies shape the regulation in a way to benefit the incumbents and push out competition.
The government should stop granting companies privileges and let the free market work.
It's called regulatory capture. Who ever is being regulated will move the regulations to their advantage - to either keep competitors out of the field completely, drive up their costs, or reduce their expenses (for instance banning mad cow testing on all cows).
This is a failure of the free market. When companies get too big, and no longer compete, they should be regulated. The free market only works when there's a ... free ... market.
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