Tag: regulation
The U.K. Competition Authority ‘Wins,’ but Consumers Lose
“Competition regulators around the world are attacking some of the most successful and innovative entrepreneurs in the world—American companies. Strangely, they can’t seem to agree on what markets these companies are “monopolizing” or what they have done wrong. And regulators sometimes contradict each other with their complaints.
The most recent example of this behavior comes from the United Kingdom’s Competition and Markets Authority. It decided to force Meta, the parent company of Facebook, to sell GIPHY—a popular tool that makes short, animated and looped videos (GIFs) that users love to share in their social media posts—to an “approved buyer.”
But were U.K. consumers harmed by the previous integration of this service? And will they be better off when a different, likely also large, company owns a mostly free online tool that people use for fun on social media?
The short answers are no and no. Much like the dog that finally catches the car, this “win” for proponents of breaking up American tech businesses will actually be a loss for the consumers they’re supposed to protect. The U.K. decision will hurt the biggest benefactors of the GIPHY-Meta merger: creators and users. And because of the nature of many internet services, it is unlikely the impact will only be felt in the U.K.”
…
“So how does a Meta-GIPHY acquisition actually help consumers? It’s easy to think of it just as a fun way to drop Real Housewives into your text banter with friends or to show your fandom for a favorite sports team or artist. Users benefit from the ease of inserting these fun graphics through a service like GIPHY rather than having to create them on their own. Still, there are other GIF generators users could reach for, and they typically do when they can’t find what they want on GIPHY.
Social media users, however, are not GIPHY’s only consumers. Brands, creators, and artists use GIPHY to design digital products that increase the awareness of their brands. Since most of GIPHY is free, that allows folks to do so at a very low cost. Still, these same creators have many other options when it comes to how to gain similar awareness, such as Snap filters or Instagram stickers. And this current model has resulted in minimal costs for its clients.
However, with a new company purchasing the service, or if it is forced to go independent, GIPHY’s revenue model could completely change. Instead, GIPHY’s new owner could seek a pay-per-use each time a person posts a GIF or charge a subscription fee to users. Even if the pricing model doesn’t change, creators of sponsored content that supports GIPHY might not find as much value in a new owner or a less integrated service. They might then spend their resources elsewhere, leaving GIPHY to languish.
Given the lack of clear harm from a Meta-GIPHY merger, why did the U.K. decide to intervene? U.K. regulators feared that Meta was getting too big, and they wanted their “approved buyers” to own it instead. This “big is bad” rhetoric is especially ironic given that Meta is not the behemoth it once was.”
…
“There is a concerning, deeper message here, and in actions like the FTC’s decision to challenge Meta’s acquisition of Within, that is alarming for the future of free markets, innovation, and business. Regulators are telling successful American companies not to innovate without permission, and that even if an acquisition benefits consumers, it still may not be approved.”
…
“Do we want consumers to pick winners and losers in the marketplace, or do we want to permit politicians to prop up the companies they like, at the expense of American businesses?”
How Federal Energy Regulations Make Dishwashers Worse
“The increase in unused dishwashers is correlated with federal energy efficiency standards that have made newer models less effective. In the last 20 years, the U.S. Department of Energy has twice tightened those standards, which limit the amount of water and electricity that dishwashers use. Manufacturers have met those standards by building machines that recirculate less water over a longer wash cycle.
Data compiled by D.C.’s Competitive Enterprise Institute (CEI) show that average cycle times rose from just over an hour when the first standards were adopted in 1987 to nearly two-and-a-half hours as of 2018. In complaints collected by CEI, many consumers said the longer cycle times had led them to start handwashing dishes.
The regression in dishwasher use is a great lesson in unintended consequences. As Procter & Gamble points out in its “do it” campaign, handwashing uses far more water than machine washing. Environmental standards that discourage the use of machines undermine the original goals of those rules.”
…
“The Trump administration briefly liberalized dishwasher standards, but the Biden administration quickly reimposed the old rules. Millions of Americans will now spill needless gallons of water down the drain by cleaning their dishes in the sink while a machine that could have done the work for them sits sadly handicapped and idle.”
Review: Can Legal Weed Win? Yes, but Only Through Deregulation
“When California legalized recreational marijuana in 2016, the state had more than 3,000 weed shops. They ostensibly served the medical market, but the rules were so loose that pretty much anyone who wanted pot could buy it legally. Six years later, California had less than half as many licensed marijuana merchants, accounting for between a quarter and a third of total sales.
Something clearly has gone wrong “when you try to legalize weed and accidentally end up illegalizing it instead,” note University of California, Davis, economists Robin Goldstein and Daniel Sumner. In their book Can Legal Weed Win?, they explain how burdensome licensing requirements, regulations, and taxes have frustrated plans to displace the black market.”
The Government Can’t Fix Social Media Moderation and Should Not Try
“Despite their increasingly bitter differences, Democrats and Republicans generally agree that content moderation by social media companies is haphazard at best. But while Democrats tend to think the main problem is too much speech of the wrong sort, Republicans complain that platforms like Facebook, Twitter, and YouTube are biased against them.
The government cannot resolve this dispute and should not try. Siding with the critics who complain about online “misinformation” poses an obvious threat to free inquiry and open debate. And while attempting to mandate evenhandedness might seem more consistent with those values, it undermines the freedoms guaranteed by the First Amendment in a more subtle but equally troubling way.”
L.A. Times Investigates California’s Marijuana Legalization Disaster
“Most people in California know what a disaster legalization has been. Most people know that the black market still accounts for the majority of marijuana purchases in California. Most people (especially those who live outside the big cities) are well aware of all the illegal grow operations. What this series does is provide specific examples of the dangerous environment that still exists, full of threats, violence, and even murder.”
…
“There is the assumption in these stories that the breakdown in the system is due to a lack of control and enforcement by police and regulators. The stories are reluctant to address the real sources: The extent of state and local taxes drive up prices, and the ability of local officials to decide who can participate in cannabis is a huge factor in the persistence of the black market. While the stories do bring up these issues to provide some context, they really don’t contend with how much of the California black market is a result of the exorbitant costs to do business legally in the state.
Instead, the illegal grow operations and unlicensed dispensaries are presented as a failure of enforcement.”
…
“The real failure here is that the state and local officials have put in so many regulatory barriers and taxes that the market cannot function properly within the boundaries of the law. Illegal grow operations flood the market with cheap goods, and licensed operations can’t compete because they have to give so much money to the government. The same holds true for dispensaries.”
California Takes on the High Cost of Mandated Parking
“Minneapolis is one test case. It eliminated parking minimums citywide as part of an update to its general plan in 2018. Crucially, the city also increased the maximum allowable size of apartments near transit and along commercial corridors at the same time. (The city also imposed some very unlibertarian parking maximums in some areas.)
The combination of those two reforms has kicked off a small boom in the construction of smaller apartment buildings, with most of those projects being built with less parking than had been typically required under the old rules.”
New York Set to Hobble ‘Legal’ Cannabis with Taxes and Regulations
“A legal market with high taxes and overly stringent regulations is still a market in which people aren’t arrested and jailed. Rules can be loosened to what people will tolerate, as they have been elsewhere. But New York officials have yet to learn that markets function based on the choices of participants. The wishes of government regulators who want to use them as social-engineering tools and ATMs don’t really matter. Marijuana markets will thrive so long as there are customers to be served. The question is whether they will thrive in the open under light taxes and regulations, or underground to escape the heavy hands of politicians.”
The Biden Administration Defends the Federal Ban on Gun Possession by Medical Marijuana Users
My Baby Needed Special Formula From Europe. U.S. Trade Policy Made It Almost Unobtainable.
“My son was born with severe heartburn and cried constantly—and the baby formula on the shelves only caused him more pain. At the suggestion of our pediatrician, we turned to a European goat milk formula that we hoped could soothe my son’s stomach until he grew out of his condition. But recently our orders were canceled, thanks to the Food and Drug Administration (FDA).
America’s baby formulas are incredibly standardized. The FDA claims that that’s safer, but those regulations mean that most formulas have multiple ingredients that could be allergens or irritants. Milk-based formulas in the U.S. also have soy ingredients like soy oil, as well as palm oil. And most American formulas have higher than average levels of iron, which can cause constipation. While many European brands are similar to American ones, you can find brands there that don’t contain so many possible irritants to a child’s sensitive stomach. We used Nannycare, and my son found it much more tolerable than its stateside competitors.
It’s impossible to say for sure why my English supplier suddenly decided not to sell formulas to a buyer in the U.S. But the timing of the cancellation provides a clue: It happened shortly after the FDA blocked a large amount of European formula from being sold, declaring that they did not meet the agency’s standards.
We are far from the only family that relies on European baby formula. Yet the free flow of perfectly safe goods into the United States is still extremely restricted. The agency’s strict rules about how formulas can be made limit options for children with medical issues and leaves parents with products that can cause their little ones pain.
Worse yet, these regulations are more driven by bureaucratic and political interests than by science. These products, after all, have not caused a wave of problems for European babies.”