Definition and Scope - Competition Law - Lecture Slides, Slides of Competition Law and Policy

Download Definition and Scope - Competition Law - Lecture Slides and more Slides Competition Law and Policy in PDF only on Docsity! Competition Policy: Definition and Scope Docsity.com We are going to have discussions on: • What is Competition? • What is Competition Policy? • What it Covers? • What is the need for Competition Policy? Docsity.com Types of competition Competition to win customers not by lowering price but by advertising, offering after-sales-service, using sales-promotion tools, etc. Competition among suppliers to win customers by offering lower price. May not be an appropriate strategy for those loyal to a particular brand. Price Competition Non-price Competition Docsity.com Forms of Market Competition Models of Competition Number of buyers Number of sellers Nature of products Barriers to entry and exit Perfect competition Very large Very large Identical products None Monopoly Very large One Single product Very large Monopolistic competition Very large Large Minimum differences None Oligopoly Very large Very few Large differences Large Docsity.com Oligopoly Market : Competition Among the Few Key Features: • Interdependence between firms in performance and strategy • Aggressive action followed by defensive reaction • Price competition and price war (Recent packages offered by Mobile Phone companies) • Intense non-price (promotional publicity) competition, which may result in wasteful expenditures. Docsity.com Components of competition policy Competition Policy Competition Law Government Policies Private Actions Deregulation and Privatization Trade Policy Industrial Policy Regulations Governing Capital and FDI Consumer Policy Other Policies Docsity.com Competition Law (National) Anti-Competitive Agreements Between Firms ( Collusion) Abuse of a Dominant Market Position Regulation of Mergers to Prevent Tactics to Gain Excessive Dominance in a Market Applies to: •Import cartels •Price fixing •Market sharing •Bid rigging •Limiting production •Refusal to buy or supply •Tie-in arrangements •Exclusive-dealing •Resale price maintenance •Territorial allocation • Predatory pricing • Price discrimination • Excessive pricing • Abuse of intellectual property monopoly •Total unification of the companies involved •Buying of sufficient shares in a company so as to have a say in policy formulation Docsity.com The three stages of provisions that a competition law constitutes are: • The behavior and structure of firms in the market • Institutional and enforcement design with a competition authority, and • Competition advocacy. Docsity.com A safeguard against practices that could drive companies out of business. Lower entry barriers to promote entrepreneurship and growth of SMEs. Efficient allocation and utilization of resources ensures more output and employment. Control of international unfair competition and restrictive business practices, such as international cartels Benefits to Efficient Producers Docsity.com On the whole, a competition policy maintains and promotes the competitive spirit and culture in the market. Docsity.com Therefore, we need competition policy to monitor, prevent and control anti-competitive practices. Concentration of Market Power Globalization and Competition threat to Outcome of Globalization and the need for Competition Policy Docsity.com