Currently, honest companies that respect the user's data cannot compete with companies that try to profit as much as possible from our it.

I see this as similar to regulating pollution. Forbidding companies from cutting costs by polluting the air and the rivers allows for innovation and entrepreneurship in cleaner alternatives.

How is an entrepeneur with a sense of ethics supposed to compete in the current environment? When there is no regulation, the people with less scuples are the winners, not the people with better product.

Off the top of my head, Obamacare led to the founding of Zenefits and other companies in that industry.

The EPA's exhaust regulations in the 1970s arguably birthed the catalytic converter industry.

If the regulation is costly enough or introduces sufficient compliance risk, the rise of an industry to help companies comply with it is almost inevitable.

I was thinking about this the other day. Didn't the HIPAA regulations create a whole new industry around the handling of patient records?

I think the point was something like “constraint forces creativity”