You are most likely right. I have never been involved in any business that targets the consumer market, so I have little first hand knowledge, but I once had the misfortune to be involved in a project to design software to aid the government procurement process. There's a huge amount of laws there, which makes it darn near impossible to submit a tender, much less design a valid request for tenders. These laws are there to combat corruption (the point is that it should be virtually impossible to, as a government employee, simply award a government project to your brother in law if he really doesn't provide the best offer), but the amount of red tape involved turned out to be staggering. According to our expert source on the laws involved, it was in fact impossible to not break the law, as there were parts of it that were conflicting with itself.

That said - sorry for going on an off topic tangent - I think that over all the consumer protection laws have public support, and the possible downsides they come with w/r to establishing new actors in a market are outweighed by the benefits they have to consumer. But nothing is without its cost, you say.