Earlier quoted context omitted.
This is a common pattern where law/regulations meet monopoly power: There is a Byzantine bureaucracy that no one understands. The monopoly blames the regulator. The regulator (if they speak at all) blame the monopoly. It's the same way with banks. Any strange and irrational bureaucracy they throw at you is claimed to be legally mandated. This is kind of true, but disengenious.
Alas, yes. That's a big part of why I suggest that regulation, if we want any at all, should focus on lowing the barriers to entry and shy away from mandating specific behaviour. The latter can be gamed by the people who can afford the good lawyers, and makes entry for newcomers even harder. Your comparison to finance is apt. It's one of the worst examples of regulatory capture. And many people have very dangerous id…
Right now we have regulations that heavily lag current realities and weak regulatory bodies that can be corrupted or lack power to effect change.
The alternative you mentioned of no regulation can't exist, because someone is always regulating the market, if not the .gov, then whoever has the biggest clout within the marketplace gets to play regulator and gatekeeper often to the detriment of the competition and consumers.