Posts Tagged ‘competition through regulation’

What it took to introduce competition in alcohol retailing

Bethesda Magazine profiles David Trone, whose Total Wine and More chain has helped introduce or reintroduce price-cutting, the negotiating of quantity discounts from vendors, and other advances in the business model for alcohol sales. Along the way, after infuriating competitors who were protected by existing state regulatory arrangements, Trone has been arrested three times, targeted by a Pennsylvania attorney general who was himself later sentenced to prison, subjected to grand jury proceedings at which allied merchants were urged to sever ties with him, and much more, which culminated in getting most of the charges thrown out and paying money to settle others. He spent millions on legal fees. After bad regulatory and legal experiences in Pennsylvania and New Jersey, Trone shifted to a new strategy, part of which has involved generous campaign contributions: “So generally what we do now when we enter a new state is hire a lobbyist, hire a great legal team, and go meet the regulators. It’s preemptive, 100 percent.” Now he’s running for Congress.

March 2 roundup

  • Pennsylvania bill would restrict the pre-paid business cemeteries could do, which by remarkable coincidence would benefit their competitors on the funeral home side [Allentown Morning Call]
  • How to get capital out of China? Lose a lawsuit on purpose [Chuin-Wei Yap, WSJ Law Blog]
  • Arms-trafficking sting caught crusader against videogames, guns: “Judge Sentences Ex-California Senator Leland Yee to Five Years for Racketeering” [KNTV (auto-plays), earlier]
  • Workplace bias, which can mean a lot of things, would be an ethics violation for lawyers under proposed ABA model rule [ABA Journal, more]
  • Breaking: New York court denies Donald Trump’s bid to throw out AG Eric Schneiderman’s suit over Trump University [ruling, The Hill, Eric Turkewitz] More background: Lowering the Bar.
  • Grounding interstate comity: California Assemblyman Evan Low (D-Campbell) wants to ban state-funded travel to sister states with religious conscience laws [Bay Area Reporter (“discrimination of any kind …will certainly not be tolerated beyond our borders.”)]
  • “NY Times: Contaminated Property Makes For Costly Inheritance” [Paul Caron/TaxProf]

A battle plan against “regressive regulation”

In a new Cato white paper, Brink Lindsey considers the possibilities of assembling a political coalition aimed at trimming at least some kinds of excessive regulation [Arnold Kling, Coyote]:

Despite today’s polarized political atmosphere, it is possible to construct an ambitious and highly promising agenda of pro-growth policy reform that can command support across the ideological spectrum. Such an agenda would focus on policies whose primary effect is to inflate the incomes and wealth of the rich, the powerful, and the well-established by shielding them from market competition. A convenient label for these policies is “regressive regulation” — regulatory barriers to entry and competition that work to redistribute income and wealth up the socioeconomic scale. This paper identifies four major examples of regressive regulation: excessive monopoly privileges granted under copyright and patent law; restrictions on high-skilled immigration; protection of incumbent service providers under occupational licensing; and artificial scarcity created by land-use regulation.

Buy our protective services, or we’ll rat you out to the feds

I’ve got a new post at Cato summarizing dramatic new testimony in the case (briefly noted here last year) of a laboratory company that got reported to the Federal Trade Commission for data breach — and drawn into a crushingly expensive legal battle — after it declined to buy data security services offered by a company with Homeland Security contracts. The battle has been raging for a while, with the nonprofit Washington, D.C. group Cause of Action representing LabMD and outlets like Mother Jones running coverage unsympathetic to its case.

May 6 roundup

California toughens criminalization for unlicensed contractors

If you hire some consenting but unlicensed neighbor for a not-very-big repair or construction job in California, there’s now a greater chance he or she will be headed for jail, no matter how happy you may be with the quality of the work. Gov. Jerry Brown has signed S.B. 315 (text, progress, promotional fact sheet), described by its sponsor, Sen. Ted Lieu (D-Beverly Hills), as a measure “to help curb California’s underground economy.” The measure would step up penalties and enforcement against persons who advertise for, or perform, repair and construction work with a value of $500 or more, counting parts and material as well as labor. (By its terms, the bill appears to apply to someone who offers to do a $500 job for your office that consists of procuring a $400 item and adding $100 for the labor of installing it.) First offenses are subject to six months in jail and a $5,000 fine, and subsequent offenses are treated yet more harshly.

There’s more. The bill, according to its legislative summary, “would additionally require that the enforcement division, when participating in the activities of the Joint Enforcement Strike Force on the Underground Economy, be granted free access to all places of labor,” at least in business locations. (Yes, “all”; you only thought your property was private.) And although the literature on the bill refers repeatedly to the need to curb “cheating” contractors, the penalties apply no matter how satisfied you may be with the contractor’s work.

That’s because protecting customers isn’t actually the point. Such is the political grip of occupational licensure lobbies that the bill passed unanimously in both houses of the California legislature with support from licensed repair and construction contractors. Lieu: “Groups supporting SB 315 are: Contractors State License Board (sponsor); Air Conditioning and Refrigeration Contractors Association; Air Conditioning Sheet Metal Association; American Subcontractors Association, California Inc.; California Chapters of the National Electrical Contractors Association; California Landscape Contractors Association; California Legislative Conference of the Plumbing, Heating and Piping Industry; California Professional Association of Specialty Contractors; United Contractors.”

In short, this is the sort of thing the California legislature does when it wants to think of itself as pro-business: it extends criminal liability for doing business in any other than the authorized way.

More: I’ve got some further thoughts at Cato at Liberty: “The costs of occupational licensure are many. Not least is that it gives established businesses a stake in making government more powerful and invasive.” And am I the only one who interprets the bill as aimed at Craigslist and at sharing-economy interfaces that match odd jobs with persons willing to do them, even if it is not announced as such? More on the law from Steven Greenhut (who was on the story before I was).

“SawStop suit stopped”

Last month federal district judge Claude Hilton dismissed an antitrust suit filed against rival makers of table saws by SawStop, a company that has patented a table saw with innovative safety features. “Hilton’s ruling, while a blow to SawStop, has no legal bearing on the company’s efforts to get the Consumer Product Safety Commission to require the use of their technology on most table saws sold in the U.S.” Trial lawyers at Boies Schiller and elsewhere have also filed numerous product liability suits against makers of conventional saws; many saw users prefer to go on buying conventional saws, which are much less expensive, in preference to using the SawStop system [David Frane, Tools of the Trade, background; earlier]