Why Being Fair Has Been Identified As An Important Criterion In Regulations

Being fair has been identified as an important criterion in regulation. How would you recognise fairness in a regulatory process and how would you illustrate either fairness or unfairness with examples from your reading?
Regulatory economics is the economics of regulation which includes the application of the law by the Government for various goals such as centrally-planning an economy and also fixing markets failures in the economy.
We must now discuss the main reasons on why regulation is necessary. Regulation is necessary to correct market failure. The three main categories of market failure that give cause for regulation are as follows:
First category is externalities. There are effects that can arise from activities that take place during production and also consumption of one individual in the economy that can have a negative effect on the welfare of other individuals in the same economy. For example negative externality being the pollution caused by firms in production. Some however can be positive for example networking effects that can spread information on a broader scale to consumers. Overall these externalities have to be regulated especially the negative externality of pollution hence the Governments intervention through Environmental regulation.
In the markets of water, electricity, telecom, transport and mailing industry, the production technology has increasing returns to scale. In each of these markets there is a large amount of fixed costs required to set up. This in its own is a large barrier to entry into the markets for new firms and this ensures low number of competitive firms in each of these industries. Without the regulation of these markets the large firms will exploit their monopoly power producing at price and output levels to maximise their profits and exploit the consumer reducing consumer