Regulators no longer the masters as monopolies turn screw on innovation

Big corporations are crying foul over successful new businesses - and Congress is listening to them


America considers itself as the standard-bearer of capitalism where competition is king and interference by government is to be eschewed whenever possible.

Suddenly though, that self-image is under threat as innovation in several industries – they are meant to like that too aren’t they? – is upending convention.

I am talking travel especially and pay attention if you mean to come here on holiday, particularly via Gatwick. Regulation can never be eliminated, of course because the consumer must be protected.

But what about regulation for the protection of vested interests who fear competition? Think taxi drivers in Washington DC or hotel owners in New York City. And then think Uber and AirBnB.

It’s hard to argue that consumers aren’t thrilled by these new services made possible by new sharing technologies. Uber has been descending on cities across the land (and overseas) allowing anyone needing to go from A to B to summon a comfortable saloon by clicking on an app. AirBnB, as you probably know, is a service that allows apartment owners to rent to visitors for a fee. Great for them and for travellers too.

You may also know both companies are under siege in the US by government regulators. New York State has tried mightily to impede AirBnB by citing archaic laws in New York City that forbid owners from renting to anyone for less than 30 days unless they are in situ at the time. The firm has won some recent rounds but the effect of the legal threats has been chilling.

Similar efforts are being made by city governments to thwart Uber. Washington DC, Indianapolis, Boston, New Orleans are a few. In each case the war on Uber is waged by those appointed to regulate taxi industries and have instead become beholden to them. Monopolies hate fresh competition. So much for free enterprise.

Now to air travel and the plans by Norwegian Air International to begin flights in July from Gatwick to JFK. It will be the only scheduled service from Gatwick to New York and, more importantly, the fares will in most cases be several hundred dollars below what the legacy carriers are charging. It’s why my daughter will be flying with Norwegian to JFK on 10 July for a three-week break here. Or will she?

You guessed it. US carriers United, Delta and American are squealing and as fast as you can say "doors to manual" the US Congress is coming to their aid. This week, the House approved a new budget bill for the Department of Transport, but not before they added an amendment forbidding it from giving Norwegian the permit it needs to launch the London-JFK service as planned.

The supporters of the bill say Norwegian has cheated by setting up its new long-haul subsidiary in Dublin simply to take advantage of the open skies treaty that the EU and the US signed in 2007. But really they are just siding with the bullies.

A spokesman for Norwegian had it about right this week. “It’s ironic that elected officials in a country where capitalism and the free market are celebrated are not making a decision based on the facts that show how we are bringing in competition, lowering prices and creating jobs,” he said.

The transport bill is not yet law, but the chances of Norwegian beginning its Gatwick-JFK service as planned in July seem to be fading fast. Which leaves one question surely more important than any other – what am I going to do about my daughters non-refundable return ticket?

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