How can tech companies “capture” the agencies that regulate them?
Regulatory capture occurs when regulatory agencies become dominated by the very industries they were charged with overseeing, prompting regulators to advance the goals and interests of those industries. While regulation is necessary and can be done well, it must always be balanced against the potential for unintended consequences that harm the consumers it is intended to protect.
Learn more about regulatory capture in this PolicyEd video.
Can we restrain regulatory capture?
Dealing with regulatory capture is difficult. While we can’t avoid lobbying in a democracy, since industries have the right to explain their case to the government, the best thing is to keep the regulatory rules simple and transparent so that it is clear if an industry is getting favors. Moreover, reducing government subsidies to private firms can go a long way toward reducing regulatory capture, as well as avoiding overregulation.
Are there historical examples of regulatory capture?
Yes. After the Great Recession, lawmakers passed the Dodd-Frank Act, designed to help avoid future bank bailouts. But in practice, it granted the government immense discretionary power to bail out and regulate Wall Street firms and the wider economy. That opened the doors for regulatory capture and put undue power in the hands of regulators and special interests.
To learn more, watch the video below.
Why are private groups allowed to restrict speech on their property?
A private group can restrict speech because there are other venues for speech available to people who hold different viewpoints. Forcing a private group to host speech it disagrees with violates its rights in the name of granting rights to others. A less intrusive solution is to allow those with opposing viewpoints to form their own organizations and organize as they see fit.
Watch the Intellections episode below to learn more about who can restrict free speech.
What are monopolies?
A monopoly is a business or organization that has the ability to prevent others from offering competing goods or services. In the case of the federal government, it has a monopoly on the force of law. To protect against potential abuses, it isn’t allowed to restrict speech, subject to the usual limitations against force, fraud, or defamation.
Click here to watch the Intellections episode on monopolies.
What if there are private companies that are monopolies? Can they limit speech on their property?
There is a special case for entities called “common carriers” that provide public utilities, and they are subject to the same restrictions as the government when it comes to restricting speech.
While there aren’t that many common carriers, one example would be a railroad that provides the only route from one city to another. Absent other options of travel, it has a local monopoly on travel between these cities.
Common carriers are subject to regulations ensuring they provide fair, reasonable, and nondiscriminatory services.