A large part of it is what is hinted at above, namely that it creates a more complex maze of compliance that smaller firms can’t absorb…essentially like virtually all regulation. I mentioned other examples of this in the monopoly post.
Here’s a nice recent post from EPJ:
The Dodd-Frank Monster Continues to Grow
This infographic from the law firm David Polk shows how big Dodd-Frank is getting — and how much bigger it’s likely to get. With this type of growth in regulation, it is going to suffocate many, many businesses. It will be particularly difficult for startups and small firms, who don’t have the funds to to hire the personnel to meet all the new regulations. Thus, in general, these new regulations will build an advantage for large firms. It creates a moat for them and snuffs out new competitors.
