Competition policy and anticompetitive practices

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  • Created on: 20-01-13 10:02
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COMPETITION POLICY
The competition commission
Aims to promote competition
Investigates anti-competitive practices within markets which may have
a negative effect on consumer welfare
Investigates when larger companies merge when they own more than
25% of the market share
Benefits of regulation
Increases contestability
Increases consumer choice
Technological innovation is dynamic efficiency
Anti-competitive practices
Tactics to used by producers to restrict competition in the market
Collusion: collective agreement between producers to restrict
competition
Cartel: groups of firms colluding
This causes abuse of the consumer with higher prices due to restricted
output
Restricts choice of product availability for the consumer
Creates barriers to entry

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