Less regulation? It’s up to business to make it possible

I have just finished a call with Vodafone to renew my mobile phone subscription.

The gentleman on the other line was very courteous. Maybe more important, he was extremely transparent in what he was asking me to sign up to with all the benefits and limitations.

But here’s the thing. Whenever he said something that clarified things and made it all transparent, he prefaced his remarks by “I’m legally obliged to tell you that….”  He also recorded the conversation in full so that there is a record that he explained everything and that I accepted all the terms.

All this is very different from my experiences with mobile phone companies a few years ago. Then the norm was opaqueness and obfuscation. Pricing structures were so complicated that one lost the will to live in trying to understand them, what was included, what was not, and so on.

Of course, complex and opaque pricing is a well known approach designed to confuse customers to such an extent that, after a period of non-comprehension, they’ll sign up to almost anything just to get off the phone.

The change is both interesting and welcome. But the fact that most of what was going on was driven by legal obligation shows that the improvement was not driven by Vodafone wishing to improve its service. Rather it has been imposed by regulation.

And there’s the rub.

Companies’ knee-jerk reaction to any form of regulation is to kick, scream and fight against ‘red tape’. But isn’t it astonishing that the good customer service and full transparency that I received from Vodafone would likely not have happened without regulation?

Some argue that competition should be sufficient to drive up standards. We all know that that is not always reliable. In many areas there is insufficient competition to drive quality. Even when there is, competition is equally likely to drive a race to the bottom as a race to the top – maybe more likely.

It’s a shame that so many companies need regulatory coercion to drive transparency and good customer service. Such behaviour should be embedded in the DNA of every company. But as we have seen several times, from mis-selling of financial products to, yes, mobile phone companies, that attitude seems to have disappeared from many companies over the last few decades.

For many, customers today are seen as consumers from whom one should extract as much profit as possible in whichever way possible.  In many cases, long gone are the days where profit was simply a consequence of a great product sold at reasonable prices. Today, short term profit maximisation is the driving force and everything else is subordinate.

In such an environment, is it surprising that there is a need for ever-mounting regulation to keep people on the straight and narrow? We would need much less regulation if business as a whole could be trusted to behave reasonably.

Business has the future of regulation in its own hands. Unfortunately, it seems likely that the spiral of bad behaviour and ever-increasing regulatory response may have become irreversible.

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Radix is the radical centre think tank. We welcome all contributions which promote system change, challenge established notions and re-imagine our societies. The views expressed here are those of the individual contributor and not necessarily shared by Radix.


  1. Henry Leveson-Gower says

    Hence maybe we should address the route cause and ask what sort of corporation structure would give them more trustworthy DNA. Maybe one where the voices of customers and other stakeholders actually had legal status within the corporation itself and so could challenge business strategies based on deception and extortion…

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