Companies are basically "snitching" on their competitors to the EPA just to get them hit with massive fines.
Instead of just lobbying for lower regulations across the board, firms use existing laws as a competitive weapon. This study shows that firms act as volunteer informants for the government specifically when a rival's violation provides an opportunity to damage that rival's market position.
Persuasion in the Political Marketplace: How Firms Snitch on Rivals to Encourage Regulatory Enforcement
SSRN · 6303359
We study an important, but largely overlooked, non-market strategy used by firms in the enforcement stage of policy: "snitching", i.e. providing intelligence about potential violations of their rivals in an attempt to persuade regulators to fine them. Building on political marketplace theory, we develop and test a theoretical model of how firms use snitching during regulatory enforcement. We show that in equilibrium, firms snitch when the rival's violations are likely to cause significant harm t