Regulatory Capture

"Regulatory capture occurs when a...regulatory agency created to act in the public interest
instead acts in favor of the commercial or special interests
that dominate in the industry or sector it is charged with regulating.

Regulatory capture is a form of government failure,
as it can act as an encouragement for large firms to produce negative externalities.

...regulatory capture occurs because groups or individuals
with a high-stakes interest in the outcome of policy or regulatory decisions
can be expected to focus their resources and energies in attempting to gain the policy outcomes they prefer,
while members of the public, each with only a tiny individual stake in the outcome,
will ignore it altogether.

Regulatory capture refers to when this imbalance of focused resources
devoted to a particular policy outcome is successful at "capturing" influence
with the staff or commission members of the regulatory agency,
so that the preferred policy outcomes of the special interest are implemented.

...A captured regulatory agency that serves the interests of its invested patrons
with the power of the government behind it, is often worse than no regulation whatsoever."

Regulatory Capture
Wikipedia