Regulation is about economics. Here's the theory: In a capitalist system, companies make decisions based on self-interest. This is good; we don't want companies acting as public charities, we want them acting as for-profit entities. But, there are effects of company decisions not borne by companies???these are "externalities."

Companies don't always take externalities into account because, well, they're someone else's problem. If we want externalities to factor into company decisions, we have to make externalities internal. Then, the natural engine of capitalism will take over.