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Except that in practice regulation nearly typically protects big incumbents from startup competitors. That is exactly the effect GDPR had in Europe: https://t

Except that in practice regulation nearly typically protects big incumbents from startup competitors. That is exactly the effect GDPR had in Europe: https://techcrunch.com/2018/10/09/gdpr-has-cut-ad-trackers-in-europe-but-helped-google-study-suggests/ https://techcrunch.com/2018/10/09/gdpr-has-cut-ad-trackers-i... Incumbents, especially in the tech industry, face a greater threat of being unseated by a startup than being unable to handle regulations. The "heavy hitters" have plenty of cash available to pay for the lawyers needed to deal with regulations, and the lobbyists needed to shape regulations to their advantage. Startups need to be careful about their budgets, and the added cost of compliance represents an entry cost that will almost certainly work against small players. Moreover, when you regulate to the point where the big incumbents suffer economically, you are typically in a state of over-regulation. The evidence is very clear that numerous freight railroads failed in the 1960s because over-regulation prevented them from adapting to new realities; it was too difficult for the railroads to shut down unprofitable routes due to service requirements and they were required to continue paying taxes and maintenance costs on redundant infrastructure. Following deregulation (the Staggers Act) America's freight rail industry was able to reorganize and become profitable once again (and today the North American freight network is one of the most efficient systems on earth and is envied by the world). Passenger railroads are still uneconomical even in regions with high population densities that are absolutely dependent on passenger service (e.g. the northeast corridor, which is the ideal scenario and home to some of the only services that manage an operating surplus) largely because of persistent over-regulation (especially safety -- Acela trainsets are significantly heavier than comparable equipment in Europe and Asia and are more expensive to operate). Good regulation is certainly possible, but it is the exception rather than the rule. The more typical pattern is either the economic failure of an industry (over-regulation) or regulatory capture.

bitwize 8y ago
> Good regulation is certainly possible, but it is the exception rather than the rule. The more typical pattern is either the economic failure of an industry (over-regulation) or regulatory capture. In the USA. It's highly unclear whether that holds for democratic regimes.
blub 8y ago
No, that's not what happened with the GDPR. Most small companies rightfully came to the conclusion that they can't afford to not comply, so at least they tried to. Google though they can afford not to, so they didn't. Now Google is starting to get hit with fines (e.g. France), so they'll probably change their minds.
- tomhoward 8y ago
  Google can afford to take as long as they want to comply, and cop the fines along the way. The startups that never get off the ground because the cost of compliance is prohibitive will mean less competition for Google etc in the long term.
  - spydum 8y ago
    I think this is nonsense - it’s only true if you believe the businesses should have existed without protecting user privacy. GDPR and such don’t require you to go out and buy any hardware, or pass through any other expensive compliance audits. PCI/DSS didn’t kill e-commerce, it just set a minimum bar for what companies SHOULD have already been doing.
    - betterunix2 8y ago
      Any company effected by GDPR is at risk of being fined a (relatively) large sum. Even if the compliance cost of GDPR appears low, the regulatory risk is large enough that companies have to bear the cost of legal staff to deal with that possibility. Big companies are in a much better position to pay for such things than small companies. Moreover, startups seeking capital must convince potential investors that the chance of being wiped out by a GDPR complaint is low -- on top of convincing those investors that their business model is viable, that they are entering the market at the right time, etc. Plenty of startups with great ideas never get off the ground because they cannot get the initial capital they need, or they fail to get enough capital to survive a rare negative event. There is not much doubt that regulations raise the cost of entry to a market. The real question is whether or not it is worth it for society -- if we are willing to sacrifice a few small companies for the sake of the regulatory goal. User privacy is a fine goal, but the EU is losing the leadership it once had in the tech industry to the US and China. Where is the European answer to Google, Facebook, Tencent, or Alibaba? Where is the Europe in the AI race? It is not just GDPR; the right to be forgotten, the draconian copyright rules, and so forth have all contributed to a stifling regulatory environment in Europe and a stagnant tech industry.

bitwize 8y ago

> Good regulation is certainly possible, but it is the exception rather than the rule. The more typical pattern is either the economic failure of an industry (over-regulation) or regulatory capture. In the USA. It's highly unclear whether that holds for democratic regimes.

blub 8y ago

No, that's not what happened with the GDPR. Most small companies rightfully came to the conclusion that they can't afford to not comply, so at least they tried to. Google though they can afford not to, so they didn't. Now Google is starting to get hit with fines (e.g. France), so they'll probably change their minds.

tomhoward 8y ago
Google can afford to take as long as they want to comply, and cop the fines along the way. The startups that never get off the ground because the cost of compliance is prohibitive will mean less competition for Google etc in the long term.
- spydum 8y ago
  I think this is nonsense - it’s only true if you believe the businesses should have existed without protecting user privacy. GDPR and such don’t require you to go out and buy any hardware, or pass through any other expensive compliance audits. PCI/DSS didn’t kill e-commerce, it just set a minimum bar for what companies SHOULD have already been doing.
  - betterunix2 8y ago
    Any company effected by GDPR is at risk of being fined a (relatively) large sum. Even if the compliance cost of GDPR appears low, the regulatory risk is large enough that companies have to bear the cost of legal staff to deal with that possibility. Big companies are in a much better position to pay for such things than small companies. Moreover, startups seeking capital must convince potential investors that the chance of being wiped out by a GDPR complaint is low -- on top of convincing those investors that their business model is viable, that they are entering the market at the right time, etc. Plenty of startups with great ideas never get off the ground because they cannot get the initial capital they need, or they fail to get enough capital to survive a rare negative event. There is not much doubt that regulations raise the cost of entry to a market. The real question is whether or not it is worth it for society -- if we are willing to sacrifice a few small companies for the sake of the regulatory goal. User privacy is a fine goal, but the EU is losing the leadership it once had in the tech industry to the US and China. Where is the European answer to Google, Facebook, Tencent, or Alibaba? Where is the Europe in the AI race? It is not just GDPR; the right to be forgotten, the draconian copyright rules, and so forth have all contributed to a stifling regulatory environment in Europe and a stagnant tech industry.