Introduction to Competition Policy and Law - Competition Law - Lecture Slides, Slides of Competition Law and Policy

Download Introduction to Competition Policy and Law - Competition Law - Lecture Slides and more Slides Competition Law and Policy in PDF only on Docsity! VI Bsc Casi mKe Competition Policy and Law Docsity.com Competition policy A broad definition: The full range of government policies that influence competition in domestic markets. This could include polices relating to tariffs, industry subsides, the operation of government owned businesses, the regulation of natural monopolies, the behaviour or privately owned businesses, infrastructure development, regional development etc Docsity.com Competition law The second level objectives of a competition law: • to clearly define what conduct is unlawful • to provide an effective mechanism for investigating potential contraventions and examining applications for exemptions • to provide a fair and competent process for determining contraventions and applications for exemptions • to provide for effective redress for those adversely affected by unlawful anticompetitive conduct • to provide effective sanctions against firms and individuals found to be in contravention of the law Docsity.com Discussion point Why does any country need a competition policy and law? Docsity.com Behaviour vs structure Behaviour • The rivalrous behaviour will often impact on other firms but it is only when it negatively impacts on the process of competition that competition law intervenes • Some behaviour by firms is assumed to always negatively impact on competition and is always unlawful, for example collusive bidding Prohibitions on this type of conduct are usually drafted as per se provisions • Some behaviour by firms may only have a negative impact on competition in certain market situations and therefore should not be assumed anticompetitive, for example agreements between supplier and its business customers Prohibitions on this type of conduct are usually drafted as rule of reason provisions Docsity.com Categorising market place behaviour for competition law analysis • Horizontal conduct; that is conduct between firms at the same functional level. For example agreements between manufacturers or between wholesalers or between retailers. • Vertical conduct; that is conduct between firms at different functional levels. For example between a manufacture and a wholesaler or between a wholesaler and a retailer • Unilateral conduct; that is conduct by a dominant firm • Mergers; that is the acquisition of ownership or control of one firm by another Docsity.com Horizontal Restraints Agreements between unrelated firms who would otherwise be competing in the same market Examples include: • Agreements on prices or outputs • Collusive tendering • Market sharing Docsity.com Horizontal Restraints Most horizontal restraints are subject to a per se prohibition because they directly affect competition between firms who would otherwise be in competition with each other. Docsity.com Exemptions and exceptions: • Sovereign acts of states; • Labour markets (trade unions); • Regulated industries; • Defence industries (in some countries); Docsity.com Exemptions and exceptions: • Small and medium sized enterprises; • Research and development (R&D) ventures; • Specific distribution agreements; • Export cartels and joint ventures for export. Docsity.com Some limitations of competition law: • Doesn’t seek to change the structure of the market; • Monopolies may continue to earn monopoly profits; • Applies to domestic markets only, not to foreign markets; • The benefits may not be realised if the application of the law is not close to universal; • Must not be in conflict with other economic policies affecting competition. Docsity.com The role of economists in competition policy and law • Measuring and analysing historic market activities to evaluate the effects of firm behaviour, market structure and government policies; • Forecasting effects of firm behaviour, market structure and government policies; • Explaining the above to firms, competition authorities, the media and courts. Docsity.com UNCTAD areas of work: • Promote role for competition policy in the development of the business sector; • Assist developing countries in reaping the benefits of trade and investment liberalisation; • Formulate and enforce effective competition law and policies; • Build consensus and best practices and international standards in enforcement. Docsity.com