Shifting Transaction Costs

Regulatory measures can impose, shift or reduce transaction costs for business operations.

For example, the Committee on Foreign Investment in the U.S. (Cfius) has recently moved to impose security requirements on the proposed Nokia Siemens venture.

It is not clear whether Cfius is going beyond its mandate by imposing such requirements. "The process has become a tool for Cfius to impose security requirements on foreign companies, while government lacks the legal authority to impose them on U.S. companies," a U.S. business lawyer David Marchick told Financial Times. (Reuters cites the FT report in its own story on the same subject.) 

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