To regulate or not to regulate mobile apps market..

Cato’s regulation magazine has this article on growing mobile apps market.

Earlier mobile apps were mainly to do with games, chatting etc. Now Now thanks (0r no thanks) to apps like Uber taxi etc they are posing threat to incumbent businesses leading to all kinds of noises from the former.

So what should regulators do? Three options:

There are three potential options for regulators. First, the existing regulatory structure can be made to apply equally to all firms in an industry, whether they operate via mobile app or not. Existing cartels typically advocate this method because it allows them to preserve their position as privileged incumbents while forcing startup competition out of the market. It may sound like the “fairest” solution, but the costs, as we have seen, are enormous.

Second, the current regulatory regime could be eliminated, applying the current model for mobile apps to other firms as well. Consumers would enjoy the gains of increased competition, lower prices, and more choice. And the cartelized incumbents would lose whatever benefits were provided by existing regulations. However, the practical (read: political) challenges of repealing such a broad array of regulations may be insurmountable, at least in the short term.

The third option is to leave things as they currently stand, with new technologies escaping the regulatory burden and slowly chipping away at the old regime. While this may seem like the least fair of the three options because it treats some firms differently than others, for the advocate of limited government it has some advantages.


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