The New York Times is shocked to discover that big, established businesses often attempt to manipulate governmental regulation to their advantage over entrepreneurial startups. This hidden cost of regulation is one that I noted awhile back in regard to the proposed XM-Sirius merger. Many well-meaning folks — usually those without much experience in business matters — believe that regulation is good for the consumer because most established businesses generally abhor such regulation. However, established businesses typically use a part of their superior resources to manipulate regulation to their advantage and against the threat of beneficial competition from new companies. A big, well-established business can absorb the high cost of regulation and pass it along to the consumer. A thinly-leveraged start-up generally does not have that luxury.
Warren Meyer, who actually confronts this phenomenom as he runs his small business, makes the same point here and provides the following insightful quote on the subject from the late Milton Friedman:

The justification offered is always the same: to protect the consumer. However, the reason is demonstrated by observing who lobbies at the state legislature for the imposition or strengthening of licensure. The lobbyists are invariably representatives of the occupation in question rather than of the customers. True enough, plumbers presumably know better than anyone else what their customers need to be protected against. However, it is hard to regard altruistic concern for their customers as the primary motive behind their determined efforts to get legal power to decide who may be a plumber.

Thom Lambert also chimes in.