Katie Chubb had an idea for a business. She noticed that hospitals in Augusta, Georgia, weren't meeting the demand for birthing services. So she founded Augusta Birthing Center, a nonprofit, freestanding birth center that could offer a better experience at a lower price. But when she applied for a license to operate, the existing hospitals protested to the state regulatory body that her services were not "needed" in the market. The state denied her the opportunity to start her business because of those protests.Chubb ran squarely into Georgia's certificate of need (CON) law—also known as certificates of public convenience and necessity in some states. Under a CON scheme, the regulatory body requires the applicant to show that their service is "needed." But that's not all. The agency also notifies existing businesses that someone has applied for a certificate. The existing businesses can "protest" the application. That is, they testify that they are already meeting demand, so there is no "need" for a new business. It's a competitor's veto.
