Comment by btown
7 months ago
> Introduce rules so hard to comply with that only big tech will be able to comply
When intentional, this is Regulatory Capture. Per https://www.investopedia.com/terms/r/regulatory-capture.asp :
> Regulation inherently tends to raise the cost of entry into a regulated market because new entrants have to bear not just the costs of entering the market but also of complying with the regulations. Oftentimes regulations explicitly impose barriers to entry, such as licenses, permits, and certificates of need, without which one may not legally operate in a market or industry. Incumbent firms may even receive legacy consideration by regulators, meaning that only new entrants are subject to certain regulations.
A system with no regulation can be equally bad for consumers, though; there's a fine line between too little and too much regulation. The devil, as always, is in the details.
Maybe one way to do it is to exempt smaller operations from regulation. eg less than say 20,000 users, no regulations.
The UK had a rule that gave small employers a £4,000 discount on national insurance.
Sketchy large employers like G4S responded by setting up tens of thousands of "Mini umbrella companies" [1] with directors in the Philippines, each company employing only a handful of people - allowing G4S to benefit from the £4,000 discount tens of thousands of times.
Sadly, exempting small operations from regulation isn't a simple matter.
[1] https://www.bbc.co.uk/news/uk-57021128
If it was something we wanted to punish, it needs claw backs and draconian fines plus piercing the corporate veil when those companies are suspected of it. Usually though, there's little downside to abusing the system, so the risk/reward is badly skewed.
To reinforce your argument, in the linked article GFS claim that they weren't responsible for the tax avoidance. The recruitment companies they subcontracted out came up with this wheeze.
Complex corporate structures enable plausible deniability. The CEO of GFS probably didn't know what was happening, but also probably didn't want to know whilst enjoying the low fees charged from the recruiters.
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It can't be "no regulations", but yes, in general every law that requires compliance infrastructure should include a minimum size to ensure it only applies where it is relevant. In this case though, I believe the intent of the UK law is to ban all online communication that is not subject to safety scanning and the like. It's fundamentally a draconian law.
It can be no regulation.
There has not been regulation for online forums for forty years and Earth did not explode or human kind did not end.
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And in cases where you can't make small operations exempt then the government should freely offer the services to handle the regulatory burden.
Tiered requirements scaled by size and/or impact is an obvious middle ground between equal obligation to all entities and a binary on/off status.
As an example of impacts not necessarily correlated with size, a comms platform for, say, the banking or finance communities, or defence and military systems, would likely have stronger concerns than one discussing the finer points of knitting and tea.
This is eminently sensible, should happen everywhere.
It almost always doesn't, because the big guys have lobbyists and the small guys don't.
The big guys would rather not have to comply with these rules, but typically their take is, well, if we're going to have to anyway, let's at least make it an opportunity to drive out some of the scrappy competition and claim the whole pie for ourselves.
Lead poisoning is not less dangerous when your house is built by a small builder.
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I've always wondered why regulators don't bear all the costs induced by their regulations.
How would they pay the costs when they don't bear any of the profits from their regulated industries?
But regulators do, through the taxes the industries pay on the profits.
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