> Wouldn't that create an enormous hole in the market for other less-scummier companies to jump in, albeit at perhaps lower margins?
A certain amount of margin is required for the company to even try to do business. Unfortunately, when the "let's turn the screws on this company" discourse starts getting Old Testament, people stop considering that.
If you want a good real life example of this, look at CA insurance companies. The state limited the rates they could charge to the point where many of them simply stopped signing up new customers and started dropping old ones.
There were no new insurers to take their place because it wasn't profitable for them either.
Companies ALWAYS pretend that this will be the result of regulation, but that doesn't change the fact that they're sometimes right.
A certain amount of margin is required for the company to even try to do business. Unfortunately, when the "let's turn the screws on this company" discourse starts getting Old Testament, people stop considering that.
If you want a good real life example of this, look at CA insurance companies. The state limited the rates they could charge to the point where many of them simply stopped signing up new customers and started dropping old ones.
There were no new insurers to take their place because it wasn't profitable for them either.
Companies ALWAYS pretend that this will be the result of regulation, but that doesn't change the fact that they're sometimes right.