Regulations that create exceptions for key big players entrench them further and their poor business practices against competitors that wish to usurp their market dominance. New entrants have to play by the rules, but established ones get preferential treatment.
The regulations might be partly in place to protect the big players from pesky small competition? I have no way to judge that, though. But if that's the case, perhaps the regulations can be changed.
That isn't a general truth. Regulation usually favours larger players because regulation favours businesses who can demonstrate compliance with regulation, and that is usually expensive. It is also much easier to achieve compliance if it is an incremental change to an existing business rather than something to be absorbed from scratch - so regulations also favour established businesses.
The problem is the same argument also works in reverse: few regulations just make it easier for larger players to block smaller players from operating via dishonest business practices.
Ultimately existing players always have the advantage.
As a side note: the startup world is thriving in Europe. So EU regulations can’t be that high of a barrier ;)
That's lip service so the big players can have their regulatory burden reduced. High startup costs and anticompetitive practices are the most significant mechanisms preventing new market entrants.
Isn't it much worse to have big companies in a heavily-regulated industry where those big companies largely control the regulations? Surely they will influence the regulations to increase barriers of entry into their industry.
People like to think those sorts of restrictions affect only the big players, when it's more the reverse - the largest companies have the most resources to devote to carefully jumping through legal hoops.
As I wrote already in another comment: all these regulations will end up doing is strengthen the market position of the established players and cripple any competition from new incumbents :(
It’s the end of an era...not too long ago anyone could compete with the big players...soon nobody will
That argument is often used in bad faith/FUD by the big players themselves to halt any regulation attempts.
Regulations can be adapted to affect only the companies that reach X percentage in sales or in market share. The EU's Digital Markets Act does precisely this, for instance.
The regulators can let smaller players grow and thrive, and regulate them once they've exceeded a certain threshold.
> Basically, regulators don't have the balls to go after the big guys.
The other component to this, is that regulatory compliance becomes a significant barrier to entry for new firms. Incumbents end up gaining even more organizational power as market power increases, and competition on price and service quality decreases.
The narrative here seems not so hard to predict. Large incumbents may still have revenue which is negatively impacted by the regulation at the same time that the regulation raises the barrier to entry for smaller competitors. They're not mutually exclusive concepts.
Large companies rule every market. Startups thrive in niches, not pockets with less restrictions and regulations. Once a market is established it becomes incredibly hard for new companies to enter and compete not matter the regulations as larger companies can take advantage of scale.
Perfect competition exists almost no where, and you should read up on the conditions when it is allowed to take place. Regulations are part of the equation, but not nearly all of it.
That is the typical situation. Regulation protects the entrenched large organizations who are mostly 'grandfathered' in and set the standard for what is permissible. And it then shelters the giants from competition coming from smaller organizations. This is how companies ossify themselves into the larger structure of government.
Regulations that create exceptions for key big players entrench them further and their poor business practices against competitors that wish to usurp their market dominance. New entrants have to play by the rules, but established ones get preferential treatment.
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