I think you missed my point and the discussion on Wikipedia. You seem to be assuming that essentially all regulations are correctly aligned with the public int

I think you missed my point and the discussion on Wikipedia. You seem to be assuming that essentially all regulations are correctly aligned with the public interest. If that were the case, you'd be correct that compliance costs would (in an efficient equilibrium) be correctly internalized, merely excluding inefficiently small companies from the market [1]. However, this is not the world we live in. Uncountable historical examples, and the massive size of the corporate lobbying industry, are clear evidence that companies often shape their own regulations to their benefit. So on priors it's much more likely that Microsofts public call for regulation -- which is just a particular form of lobbying -- is in their own interest, not some pure expression of civic duty. [1] Of course, we are not automatically in an efficient equilibrium, and there exists worlds where the reduced competition due to barrier to entry create costs that are larger than the benefits of the regulation. But I'm happy to put that scenario aside.