3. As an alternative, industry could propose a voluntary self-regulatory program and seek advice from the Department of Justice or the FTC on its legality. This third option does not provide as adequate antitrust immunity as a statute, guide or regulation,21 but it would at least involve government review and could introduce procedures to complement industry cooperation through government coercion. While administrative agencies often have special skills and knowledge, especially when dealing with only one industry.3 In the case of the Department of Justice and the Federal Trade Commission, however, this expertise represents the professional skills of lawyers and economists trained to research and analyze controversies. Subjects – not tainted by the practical know-how of businessmen, engineers and bankers. In addition, the government sometimes takes extraordinary measures to protect businesses living in difficult economic conditions. Some economists argue that the Troubled Asset Relief Program (TARP) and subsequent stimulus programs prevented a repeat of the Great Depression. Similarly, the Coronavirus Aid, Relief, and Economic Security (CARES) Act may have prevented many companies from going bankrupt in 2020. 50 www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Annual-Reports/English/DB05-FullReport.pdf „First of all, it is clear that .. the class action by the Exchange and its members, if conducted in a context without other federal regulations, would in itself constitute a violation of Section I of the Sherman Act.
9 The first of the above variants is so obvious that it is not necessary to examine further its availability in the present case. However, the second and third forms of teamwork between industry and government are less understood and therefore merit analysis. It is true, of course, that with „a little luck,” the industry can enjoy the happiness of self-regulation without any government involvement being disturbed. But it seems obvious that the legitimacy of self-regulation, which is protected exclusively by industry – if and when it is „caught” – is more likely to be challenged by the courts than cooperative regulation that is also produced by government. In addition, the courts have been even more critical of industry self-regulation, in which businessmen have sought not only to prohibit overt violations of the law, but also to improve their industry`s practices and products. This was the case even when the parties` sole objective was to uphold higher ethical standards throughout their industry. Another sanction to ensure that businessmen take seriously such regulations proposed by industry and approved by the Government would be the obligation to send a questionnaire under Article 6 to all relevant enterprises in the sector concerned, asking them to report within a few days whether or not they are complying with the provisions of the Regulation at the time of writing. Thus, under penalty of perjury, the irresponsible or irreconcilable minority would be forced to choose to comply with the industry`s standards of fair competition or to choose to defend its dissenting position immediately in an administrative procedure. While many regulatory costs initially fall on regulated firms, these costs are necessarily passed on – to consumers in the form of higher prices, to employees in the form of lower wages, and to investors in the form of lower returns on investment. For this reason, regulation can bring not only great social benefits, but also major negative effects on prices, wages, business investment and employment opportunities. As mentioned earlier, regulation essentially functions as stealth taxation. The balance is often ignored in the political debate – when it is wrongly assumed that regulation is a „free meal”.
Let`s go back more than 30 years, to the dawn of the free and open digital age, when it seemed entirely appropriate for the World Wide Web to monitor itself. However, times are changing and advances in data collection and storage mean that highly personalized information has become a valuable asset. A system based on the goodwill of the majority and a treaty in small print that no one reads will be enough anymore. Should industry expect more regulation? Is this to be welcomed? Because the impacts of regulation are diffuse and difficult to measure, no estimate of the true costs of regulation is entirely reliable, but some researchers estimate the total annual cost at more than $2 trillion.8 Other research suggests that the burden of economic growth may be twice as high. About $4 trillion a year, or $13,000 for each man. Woman and child in the United States.9 And we will never know the other costs, such as the value of jobs that were never created, factories that were never built, drugs that were never discovered, or entrepreneurial ideas that were never realized. The businessman also has two possible roles in promoting compliance with our antitrust laws. The first is to monitor the practices of one`s sole proprietorship; The second is to work with competitors to control the behavior of your industry.
It is in our interest as an industry to comply with regulations and to be transparent and united to protect customers. This will make it easier for today`s businesses to adapt in an environment where consumer trust is critical. Trade tariffs are also useful for small businesses that don`t have the resources to go global. Big business, of course, likes free trade because it gives them the license to move their production overseas. However, such a move often means the collapse of local small businesses. Regulation (like other instruments of public policy) has enormous potential for right and wrong. Well-chosen and carefully crafted rules can protect consumers from unsafe products and ensure they have the information they need to make informed decisions. Such rules can limit pollution, increase worker safety, prevent unfair trading practices and contribute in many other ways to a safer, healthier, more productive and fairer society. On the other hand, excessive or poorly designed regulations can lead to confusion and delays, unreasonable compliance costs in the form of capital investments, labour and ongoing paperwork, delay innovation, reduce productivity and inadvertently distort private incentives. The contrast between the Federal Trade Commission`s current legalistic and realistic approach to regulating business ethics reminds me of the difference between two ministers who tried to improve the moral behavior of their communities a few years ago. The former thundered with traditional theology that God would one day punish their sinful behavior. The second asked his church to help God by forming groups that deal with these earthly errors today.
The Commission judiciously complements the liturgy of litigation by learning from laymen in order to achieve fair competition in the industry. Moreover, the Federal Trade Commission has been at the forefront of this salutary self-assessment of the government`s role in regulating trade. For example, in its 1964 annual report, the Commission openly acknowledged that „if the Commission could persuade businesses to clean up their own housework, the public interest would be served just as well, more quickly and at a fraction of the cost.” 5 The unreality of believing that, without assistance, government agencies have the resources to enforce industry ethics regulations is also indicated by the discriminatory prices and conditions that prevail in many trades. The powerful buyers in these industries play sellers against each other and end up forcing their sellers to give them preferential treatment that is not justified by legal, economic or moral reasons. The occasional proceedings against those who give and/or receive such discrimination are relevant to the few respondents involved, but their competitors continue to engage in offensive practices. And when the government tries to crack down on everyone in an industry involved in such illegal behavior, it finds itself entangled in a quagmire of almost intractable problems.1 If politicians and regulators really wanted to help most businesses and employees, they would adopt regulations that would favor small businesses, where most economic activity takes place. Although the culprits of the debacle came largely from the corporate world, Sarbox`s net effect on small businesses was to add fixed costs (massive accounting fees) to the IPO, an expense that large companies could easily afford, but which was (and is) heavy for small businesses. However, the time it takes for government to participate in regulating business practices is only a small part of the problem. Two much more important disadvantages are for the government when it tries to control the ethics of competition. These disadvantages are a lack of resources or a lack of industrial know-how.
Government interventions suffer from a bad reputation because they are considered anti-business and too restrictive. This can be true, especially when government surveillance forces companies to adapt – often with technical and operational investments – which impacts revenues and profits. However, when regulations are fairly and effectively tailored to each industry and involve experts in the field, they can serve as a catalyst for better business practices. Although difficult to measure, it is widely accepted that the quality and extent of government regulation is „an important determinant of wealth.” 48 The World Bank conducts annual Doing Business surveys that measure government policies and the ease of doing business in different countries.