Too many rules can paralyze businesses, while too few risk neglecting consumers and public services. How far can the government go in imposing obligations on companies?
Legal professional Marin Coerts of Vrije Universiteit Amsterdam examined how obligations attached to licenses and concessions can maintain balance in regulated markets. Her conclusion: implementation requirements are effective only when they are both practically achievable and legally sound.
'Rules are necessary to protect consumers,' Coerts states. 'However, they must also be feasible for businesses. Otherwise, they risk stifling innovation and distorting market dynamics, while too little regulation leaves sectors like public transport, energy, and telecommunications vulnerable.' Coerts stresses that tailored, market-aligned regulation is essential. 'Regulation is not an end in itself,” she explains. 'It must genuinely safeguard public interests.'
Balancing regulation and free market dynamics
A concrete case involves rail transport. When implementation mandates, such as concession rules, fail to align with real-world operations, timetables and passenger service can suffer. But when obligations are calibrated to what operators can realistically deliver, markets can support more reliable and customer-focused transportation. Coerts notes that this principle extends to energy and telecom sectors as well.
Her findings offer policymakers, regulators, and market actors strategies to craft regulations that both protect public interests and reinforce market efficiency. 'Especially amid ongoing debates about the role of government in the economy, these insights can help ground decision-making,' Coerts adds.
Research with practical impact
Coerts combined legal analysis with empirical methods: three case studies conducted with governments and industry partners, plus an auction experiment that illustrates how implementation mandates influence market behavior. The study thus delivers both theoretical and actionable insights.
The research connects with current regulatory debates, such as those in energy policy and the future of public transport. It provides concrete guidance on the strategic use of implementation requirements that balance public welfare with healthy market functioning.
Coerts will defend her PhD 8 October at Vrije Universiteit Amsterdam.