I believe it's a reference to a general effect of regulation, which is by making the business being regulated more expensive due to following regulations, it prevents smaller businesses from popping up to potentially displace the larger business.

For a generally positive example of this, see a good chunk of the history of Silicon Valley with smaller tech companies displacing larger companies like IBM, because there was no regulation stopping it. For an example generally less loved around here, consider Uber making a good pass at eating the entire Taxi industry by virtue of dodging regulations.