Posts tagged as:

competition through regulation

Incumbent firms “have an army of lawyers” and aren’t afraid to use them [Jon Brodkin, Ars Technica]


I spoke on Thursday to the Bastiat Society chapter in Charlotte with some observations rooted in public choice theory about the “three-tier” system of state liquor regulation familiar since Prohibition. A few further links for those interested in the subject:

The disappearance of the cheap, popular incandescent bulb “has become a fitting symbol for the collusion of big business and big government…. the market didn’t kill the traditional [low-profit-margin] light bulb. Government did it, at the request of big business.” [Tim Carney]


It’s pretextual and cronyish in motivation, argues Jim Epstein at the Daily Beast (earlier).

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…maybe City Hall is not your friend [Arnold Kling, Nick Sibilla/IJ, earlier here and here]

May 2 roundup

by Walter Olson on May 2, 2013

April 20 roundup

by Walter Olson on April 20, 2013

  • “Victory For Blogger Patterico In Free Speech Case” [Ken at Popehat, earlier]
  • “Watch ‘disparate impact’ become the new HUD jihad if it succeeds in [Westchester]” [Jackson Jambalaya, earlier]
  • “Big Tobacco uses Big Government to keep out Small Competitors” [Tim Carney, DC Examiner]
  • Casinos or no, Connecticut tribes want the federal dole [AP]
  • High cost of litigation to California municipalities [L.A. Daily News, new CALA report in PDF] “San Francisco’s iconic cable cars cost city millions of dollars in legal settlements” [AP]
  • Morning sickness drug Bendectin, famed casualty of unfounded litigation, returns to market renamed diclegis [MedPageToday, David Bernstein; background here, etc.; classic account from Peter W. Huber's Galileo's Revenge] Another Bendectin sequel: Barry Nace, former ATLA/AAJ head, draws 120-day suspension from West Virginia high court [Chamber-backed WV Record]
  • “Tennessee’s ‘guns in parking lots’ bill a net drain on liberty [George Scoville; similarly Bainbridge and earlier] Another pro-gun but anti-liberty idea: Colorado lawmaker wants to force firms to hire guards if they deny armed customers access to their premises [KOAA, SecurityInfoWatch, Durango Herald (idea nixed in committee)]

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Enough that 33 states have so-called enacted At Rest laws, requiring that bottles spend time in an in-state warehouse before being sold to consumers. Although the laws limit competition, drive up prices to consumers, and make it harder to special-order less common labels, New York may join the list following generous donations to politicians from an in-state wholesaler. [New York Post] FTC attorney David Spiegel analyzed anti-competitive liquor laws in this 1985 article (PDF) in Cato’s Regulation magazine.

And: I’ve posted an expanded version at the Cato blog. (& Michelle Minton, CEI “Open Market,” who cites an informative column by Tom Wark,, to the effect that the New York bill may be dead for now.) (Edited for accuracy 4/9: licensed New York wholesalers already own warehouses in both New York and New Jersey, and the bill would have protected the former from competition from the latter)

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Is this what Congress intended, or what the public was told, when the FDA was given authority over tobacco in 2009? Jacob Grier at the Atlantic:

As first reported by Michael Felberbaum of the Associated Press, since 2009 the agency has received about 3,500 substantial equivalence reports [i.e., submissions seeking approval for new products on the grounds that they are substantially equivalent to products already on the market]. Approximately 115 employees work on reviewing them. And to date they have issued exactly zero rulings.

Can it really be the case that none of the 3,500 reflect new products that are substantially equivalent to (or for that matter safer than) the cigarettes already on the market? And while we’re asking questions, who benefits when new competition for existing products is cut off? More: Michael Siegel.

Compounding pharmacies, which mix medications to order, are a corner of the drug business that has been much less heavily regulated than mass-manufacturing drug companies. As a result, the compounders began expanding their market presence as against the mass manufacturers, and even get into mass manufacturing methods themselves. The process accelerated in the past few years after tightened FDA control of conventional makers’ production practices (under GMP, or Good Manufacturing Practice, regulation) began to result in widespread production-line suspensions; for hospitals and other users, the availability of compounded alternatives is often the only fallback in the face of shortages.

Unfortunately, poor quality control at some compounders resulted in a series of fiascos culminating in a meningitis outbreak. Now the Washington Post reports that major drug companies are seizing the chance to hobble their competition by pressing for maximally burdensome regulation of compounders, including the addition of regulations unrelated to safety, such as rules aimed at restricting the compounding of formulas that imitate the action of patented products. Hospitals, which sometimes engage in compounding themselves to obtain medication for their patients, say overregulation could worsen the problem of drug shortages. [Kimberly Kindy and Lena Sun, Washington Post] Earlier on drug shortages here, here, etc.

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Brad Smith on how Woodrow Wilson and Henry Ford used early versions of campaign finance law to settle scores with Michigan opponent Truman Newberry [Law and Liberty]

How ketchup baron H.J. Heinz became the “main force behind the passage of the Pure Food Law of 1906″ [Tim Carney, Washington Examiner]

What may sound like just another random outbreak of safety-firstism — a proposal to require online dating sites to notify users as to whether they carry out background checks of their users — may have a bit more to it than that, as Tim Carney discovered a few years ago when he found that the “alliance” backing the idea was an arm of an existing online dating site that would profit by handicapping its competition. [Washington Examiner]

Tim Carney is glad to see the New York Times returning repeatedly to this theme [Washington Examiner]

Not entirely unrelated, a video from the Institute for Humane Studies on how regulation contributes to the widespread use of corn sweeteners in place of sugar in our food supply (“Why Is There Corn In Your Coke?” with Diana Thomas):

The Supreme Court will consider whether to grant certiorari in the case of National Association of Optometrists & Opticians v. Harris, in which national eyewear companies are challenging a California regulation that works to the benefit of their locally based competitors. The Cato Institute has filed an amicus brief supporting certiorari, as Ilya Shapiro explains:

Under California’s Business and Professions Code, state-licensed optometrists and ophthalmologists are allowed to conduct eye exams and sell glasses at their place of business, while commercial retailers – such as the national eyewear chains represented by the NAOO – are barred from furnishing onsite optometry services. Since consumers have a strong preference for “one stop shopping” – buying their glasses at the same place where they have their eye exams – California’s law gives instate retailers a crucial competitive advantage. Businesses that cannot co-locate their services have quickly vanished from the market.

The Cato brief argues that by putting the out-of-state chains at an artificial regulatory disadvantage, California is violating the Constitution’s dormant Commerce Clause.


“The CFTC is suing popular betting site Intrade. And now Intrade is telling its [U.S.] customers to start shutting down their accounts.” [Business Insider, Alex Tabarrok]

The CFTC says bets on future events must be exchange-traded as a way of assuring “market integrity,” but Bryan Caplan begs to differ:

The CFTC’s real complaint is that consumers eagerly bet on Intrade because the company exemplifies market integrity: “I trust Intrade with my money because of their reputation, not government regulation.” …The only people the CFTC is “protecting” are their own obsolete employees.

Brian Doherty notes that the CFTC’s press release is “strangely devoid of any mention of anyone being victimized or defrauded.” Followup: Tabarrok.

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As policy, it’s truly atrocious. So why is it so hard to reform? [Jeff Horwitz and Chris Cumming, Slate]

If you’re annoyed at federal bossiness, don’t just blame environmentalist groups. A group called the National Electrical Manufacturers Association is keen on restricting your choice, and it’s located right in Rosslyn, Va. where it can do something about it. [Future of Capitalism]