Two recent columns concerning the regulation of Internet commerce show how regulation sometimes restricts competition at the expense of the consumer. The Wall Street Journal argues that state regulations prevent consumers from obtaining health insurance that otherwise would be available via the Internet.
New Jersey's regulators, for example, have the power to tell insurers what kind of policies they must offer, and its regulators can enforce those restrictions on companies from other states trying to sell policies to New Jersey residents. That's why you can buy a mortgage or an automobile on the Internet from anywhere in the country, but you still can't shop around for a family health policy.
According to Colby Fambrotto, forsalebyowner.com's owner, his company has seen geometric growth since 1999, and continues to expand. This has understandably irked some in the real estate industry.
Realtors responded by pressuring the states to enforce licensing regulations on internet real estate websites. Most recently, the State of California sent a letter to forsalebyowner.com among other websites informing them that they could no longer list homes for sale without a certified Realtor's license.
For Discussion. Does the Internet make the rent-seeking characteristics of regulated industries more transparent? Will this affect the politics of regulation?