This tends to be a property of regulations in general. It costs money to comply. At a minimum you often need to hire an expert that actually understands the regulation and can explain how to comply with it.

In general that cost doesn't scale linearly with size, so bigger companies are proportionally less impacted.

Sometimes an attempt is made to compensate for this by exempting organizations under a certain size criteria.

Yes, it is a frequent problem, but efforts should be made to limit it.

It is a factor that should be considered when designing regulations. The comment with regard to the pubs was that the regulatory paperwork was a major cause for businesses being put up for sale.

There are many regulations that should exempt businesses under a certain size or with other criteria. For example small businesses that do not trade data should be largely exempt from GDPR. Small not for profits even more so.

Similarly, with VATMOSS the initial sales limit for registration was set ludicrously low.

Underlying this is a political failure to understand or even consider impacts on small businesses. When politicians talk to business they inevitably talk to big businesses.