Regulations are bad

Or how they help big corporate. And how to navigate them as a small company.

I don’t think it comes to a surprise to anyone. But regulations are a hot topic recently. They are created with all the good intent. But in the end, they only help the largest corporations, and sometimes destroy the smallest companies.

So, let’s start with a popular example. GDPR. And there’s one very visible side-effect of it – the cookie consent banner that pops up on most websites these days. Adding this banner is relatively straight forward from a software engineering perspective, but it’s either mission impossible or an expensive exercise for small companies. Small companies (outside the tech world) don’t have much idea what a cookie is, what privacy implication it has, but they still run a website. Often leveraging WordPress or Shopify etc. It was easy to setup those websites self-service. But all of a sudden they have to choose between million of plugins that claim to have the best cookie consent banner for their small website. And once they activated the plugin, they won’t know whether it even complies. Or they contract a software engineer, and all their margins of the past month are gone for a few cookies. With all the good intents, the small can only lose.

Let’s move to food. Labels are popular. From sustainable fishing to organic food to socially responsible sourcing. Labels have good intent. They help to identify a standard quickly. Example fair trade. The fair trade price is meant to pay the world market price plus a premium. A premium that should reach the producer, or better the worker at the farm. The deal is, that the premium must first be used to improve work conditions so workers benefit in a way that can easily be audited. Sadly, the premium isn’t a lot, and often the certification process and keeping authorities happy for renewals is more expensive than the premium alone. So for the smaller ones it could actually mean less money for the workers. And the very small can’t even afford the certification in the first place. The small can only lose.

Big corporate love regulations, and their complexity. They have the lobby on their side so regulations are ending up being highly complicated, the lawyers to find the right loophole, and the money to actually work within those regulations. And they have independent lawyers on their side who try to find the small who don’t (or better can’t) comply, simply to make money from them. The small can only lose.

So, what’s your choice? Regulations cover the minimum only. Loopholes included. Then there’s ethics. It’s what should be done. It’s way above regulations. Write them down for yourself as your principles. Make decisions following these principles. Your customers will understand them when being consistent. And they’ll be loyal as long as you stay true to your principles.