Lawyer: Consumer protection laws apparently do not help consumers

Nicole Lafond Contributor
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Consumer protection laws are rarely passed to help consumers, but rather to prevent competition for existing businesses, according to an Institute for Justice lawyer speaking at the American Enterprise Institute’s panel discussion of regulation, entrepreneurship, competition and political influence on Wednesday.

“For the most part, [consumer protection laws] are not helping consumers at all, and the stifling effect of these laws are constantly suppressing innovation throughout the country. And of course suppressing small business growth and all of those other things that we would like to see,” Dana Berliner, litigation director and lawyer for the Institute for Justice, said.

The panel conversation was held to discuss consumer protection regulation. Panelists addressed concerns over anti-competitive regulation, claiming it can often kill entrepreneurship, take away consumer choice and become a platform for corruption.

In particular, the vice president of the board of directors for the Handmade Toys Alliance, Randall Hertzler, shared the story of his struggles with the Consumer Product Safety Improvement Act, legislation passed in 2008 to prevent dangerous toys from being imported into the United States.

CPSIA banned lead and phthalates in toys, required third-party testing and certification of all toys and forced toy makers to include a date and batch number label on toys. As the owner of euroSource, a handmade toy company, Hertzler said he knew the changes required by the legislation would be easy for large toy manufacturers to comply with, but potentially fatal to small businesses.

“CPSIA was very large and covered all children’s products … These requirements seem to be written without an effective knowledge of how small and micro businesses operate in the United States. Many members of the Handmade Toy Alliance continue, to this day, to wait for relief from this regulation,” he said during the discussion.

The general manager of Uber Technologies, Rachel Holt, shared her company’s legal battles over taxi service licensing in Washington, D.C. and cities around the country. Uber Technologies is a taxi company operated completely through a smartphone app.

Holt claimed legislation against Uber has been passed for the benefit of larger taxi services and has learned during her time with the company the “role regulation has in hurting the entrepreneur.”

The panel discussion was hosted by AEI’s Culture of Competition Project and was led by Timothy Carney, a journalist, author and part-time director of the project. The Culture of Competition Project was developed to examine barriers to competition in all areas of American life, according to AEI’s website.

Panelists included Berlinger, Hertzler, Holt and Slate’s Matthew Yglesias. Discussion members were chosen because of their unique experiences with consumer protection regulation.

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