What are the Competition Policy Changes seen in the recent times?

Competition policy changes are being noticed and made more often than before, mainly because of the globalisation factors such as the increase in the international trade, growth of foreign direct investment, and the opening up of trade and investment barriers across the world markets. For instance, there are changes in the regulations regarding mergers in the European Union.

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In 1990 the European Commission announced a new Merger Regulation that was later supplemented and is now known as ECMR 139/2004. These regulations embrace the determination of the relevant market (SSNIP test) “a small but significant and non-transitory increase in price, assessment of whether a merger creates or strengthens a dominant position and assessment of the existence of unilateral/coordinated effects”.

The components scrutinized by these regulations consist of the market position of the merged firm, market share and other competitive advantages such as: the dimensions of activities, the regulation of infrastructure that are not easily replicable, technological benefits, advantaged entree to capital markets, economies of scale and scope, vertical integration, barriers to growth, and the strengths of the other competitors (European Commission Competition, 2011).

Why are competition policy changes important?

In the highly competitive markets of the present times, there is a necessity to remove anomalies that encourage free and fair competition and ensure that the consumers get the benefits of quality goods at reasonable prices. Moreover, entrepreneurs as well as investors also look to gain the maximum gains. Competition policy changes ensure this and see that all the stakeholders are treated fairly and there is no undue gains for some at the cost of others.

What are the benefits of the competition policy changes?

The recent competition policy changes that encourage competition have served to mitigate monopoly, collusion and exclusionary practices in the international markets that are detrimental to the consumers as well as to the rival organisations. Additionally, cross-boundary cartels that are observed to operate in markets where there are no competition laws are also controlled. By implementing the competition policy changes in all the countries, the consumers of all the countries will be protected from the anti-competitive cross-border cartels. New and fresh areas of the non-competitive markets are made available for a just and regulated competition in areas such as public utilities, communication agencies and bodies that protect intellectual property rights.

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