A good example of beneficial government regulation, for people who refuse to believe such a thing exists. (Another good example is the Internet itself, but it's best to start small)
Actually as one of the people I think you're talking about (though as someone else noted I don't know if your description of radical free-market types is perfectly accurate, it's really about net benefit) this concerns me. In principle it seems to be banning fraud, and if that's all it does then I can't really complain. But to say "you can't structure your site in such a way" I think it's rather heavy handed. I guess…
Given the way governments generally are, there's going to
be some sort of government agency with an official review
process for websites
With a lot of consumer rights in the UK, the principle is that you don't need prior approval or proactive monitoring, instead relying on complaints from the injured party to identify violations.So assuming 99% of websites comply with the law, 99% of websites have no need for any sort of official review.
IMHO your assumptions are far from evident.