Regulations benefit incumbents. That holds whether the regulations are national laws or corporate policies. When you make new rules, the established ecosystem adapts and doubles down while new players have a harder time getting started.
This is not true at all. Anti monopoly regulations, for example, exist for the sole purpose of privileging new entrants over incumbents. The actions against Microsoft, or the breaking up of AT&T certainly did not help the incumbents.
An example closer to home is that entrepreneurial activity in Silicon Valley is often attributed to California law forbidding non competes in employment contracts. This is regulation, without which, as you see in nearly every other state, workers are severely bound by their employment contracts in the work they can do while and after being employed by a company.
If regulations seem to benefit incumbents, it’s because incumbents exist and therefore can play a role in setting regulations. The counterbalance to this should be public pressure and political action, but incumbents recognizing that do much to dissuade the public from pushing for such action, including convincing people of pithy, but 180 degrees wrong ideas such as “regulations always benefit incumbents”.
The best cases occur where they raise a floor uniformly. For example I would prefer to add anti pollution systems to my paint factory, because I live in town too, and I just don't want to pollute. It would raise the price of my paint $1/gal, and not enough customers will chose a product just because it polluted less. Many of my competitors feel the same. If we all do it everybody benefits and nobody suffers relative to their competition. This is even more important in cases where the customer can't signal through the market, e.g. electricity generation. These can benefit incumbents but not necessarily hurt new entrants, especially when they are cap ex rather than op ex (e.g. minimum wage rather than an additional piece of equipment).
There are many bad examples as well, some of which raise a floor asymmetrically. For example FB, or at least their CEO, is willing to have the CDA's section 230 abolished because they have such a dominant customer base and enough cash that they believe they would be able to afford to do the resulting government mandated controls and fight any lawsuits, while a new entrant would not.
> This is not true at all. Anti monopoly regulations, for example, exist for the sole purpose of privileging new entrants over incumbents. The actions against Microsoft, or the breaking up of AT&T certainly did not help the incumbents.
The intended purpose is to help the new entrants, but I don't see Microsoft or AT&T losing anything or their smaller competitors gaining anything after the regulatory action against them.
> An example closer to home is that entrepreneurial activity in Silicon Valley is often attributed to California law forbidding non competes in employment contracts. This is regulation, without which, as you see in nearly every other state, workers are severely bound by their employment contracts in the work they can do while and after being employed by a company.
That's a matter of negotiation. I always (successfully) negotiated with my employer to exclude my personal projects from the contract. I find that employees have a lot more negotiating power than they realize.
> If regulations seem to benefit incumbents, it’s because incumbents exist and therefore can play a role in setting regulations.
I think that's synonymous with the original statement made by OP. You're just providing another reason why it's true.
The "AT&T" you know today is not the same company. It is Southwestern Bell, which bought the AT&T brand in the bankruptcy fire sale and renamed itself.
It did so because AT&T was a more valuable brand than Southwestern Bell. Looks like it worked.
> It is Southwestern Bell, which bought the AT&T brand in the bankruptcy fire sale and renamed itself.
Southwestern Bell was the same subsidiary that broke off from AT&T Corporation. AT&T Inc was the merger of the companies that were originally broken up from AT&T Corporation. Here is the org chart: https://en.wikipedia.org/wiki/AT%26T#Chart_of_AT&T_Baby_Bell...
You think that AT&T Corporation going broke and selling to a company that originated from the AT&T Corporation, which later renamed itself to AT&T Inc is a good example of a government-imposed corporate breakup?! It literally divested from those companies only to have most of them merge under the same name again.
Technically Southwestern Bell was spun off from the AT&T breakup from the 80's.
So basically SBC was one of many companies spun off from AT&T, then it bought up several of the other Baby Bell companies spun off, too. Really, it was AT&T buying AT&T.
It worked on paper, but the victor was still from the same tree.
