But if the government gives private actors coercive power to regulate their own industry, that power isn’t really self-regulation: it’s really some people in an industry regulating other people in that industry. Sometimes these regulatory arrangements involve participants in an industry regulating their competitors. In other cases, existing businesses regulate, and possibly exclude, potential new entrants. When industry has a hand in regulating “itself,” it’s reasonable to be concerned about the potential for self-interested bias and anti-competitive behavior.
May 22, 2014