Bizarre laws standing in the way of innovation

When you think of the U.S., you often think of the word “opportunity”. For hundreds of years, people have immigrated to the U.S. because it was the “land of opportunity”. That isn’t to say that there aren’t many hurdles – you need an idea, skills, drive, sometimes capital, a dash of luck, and that is just the tip of the iceberg. But generally speaking, with enough of those ingredients you stand a chance of being successful.

You also need to be conscious of the laws that apply to your business. If you are a restaurant, or a drug manufacturer, or make children’s toys, or do someone’s taxes, or are a doctor, or are in virtually any other industry or profession there are laws that are designed to make sure that what you are doing is safe. There are also patent laws that give protection to inventors, giving them enough time to recoup the risks and investment they made in creating a new product or even a new industry. But again, generally speaking, the laws and rules you must follow aren’t designed to keep you from succeeding and reaching that “opportunity” that you are working so hard for (questionable software patent laws excluded, of course).

Unless, that is, you are thinking about becoming a mover in the state of Pennsylvania.

I’ve just read about a Pennsylvania law so absurd that it just begs to be written about.

Apparently, the Pennsylvania Public Utility Commission gets to decide where a moving company is allowed to operate. If you have a moving company, and would like to expand where you operate – for example, expanding to move people to another county in the state – you must apply to the PUC for permission. The PUC ensures that the moving company is financially fit to operate, which seems perfectly reasonable and beneficial to consumers given past unscrupulous operators in the industry.

But guess what else the PUC evaluates when deciding that your business can expand? Protests from existing operators that your expansion would take away their business.

That’s right – you can be prevented from starting or expanding your moving business in Pennsylvania if competitors simply protest that your expansion would harm their business.

Talk about a law that prevents innovation in an industry. You can guess what the head of the Pennsylvania Moving & Storage Trade Association says when asked about the law:

“I think our membership would prefer to keep it the way it is, because the industry has gone through a serious economic down climb for at least the past three-to-five years, and bringing other people into the area only diminishes their business.” (Pittsburgh Business Times)

Gee, ya think? I’m sure that the newspaper industry would have been grateful if they could have protested and stopped Craigslist from launching.

What other bizarre laws stand in the way of innovation? Sound off in the comments about any other egregious ones you’ve experienced.

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Rocco Tarasi was a public accountant, investment banker, and start-up company executive before becoming a successful technology entrepreneur.