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> what can regulators do?

Regulators could say "you're not allowed to make more than X profit". They already do that with utilities, so it's not a matter of practical impossibility.

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I continue to believe that in the case of oversized margins, the government should just enter the market themselves. Buy the smallest competitor and operate it at a reasonable margin, growing it at every opportunity. If the rest of the market lowers their margins to beat it, spin the thing off.

Basically don't bother to dictate margins, just declare that market a failure.

The problem with this is it ends up being a signal in of itself, so when you say, the cap is X you end up having everyone immediately set their profits to X and never budge from there

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