What is Competition Law ?
Competition law regulates the conduct of businesses operating in a market to allow for optimum levels of competition.
The main goal in doing so is to increase consumer welfare manifested by:
- Wider choices
- Lower prices
- Higher quality goods
- Increased investment by businesses
- More effective production methods
When exclusion of rivals in business occurs, this leads to high prices being imposed on consumers and other businesses. So, by regulating business conduct, regulators ensure that rivals are not pushed out of the market.
Why is Competition Law Important?
Competition policy is about applying rules to make sure businesses and companies compete fairly with each other. This encourages enterprise and efficiency, creates a wider choice for consumers and helps reduce prices and improve quality.
Low prices for all:
the simplest way for a company to gain a high market share is to offer a better price. In a competitive market, prices are pushed down. Not only is this good for consumers - when more people can afford to buy products, it encourages businesses to produce and boosts the economy in general.
Competition also encourages businesses to improve the quality of goods and services they sell – to attract more customers and expand market share. Quality can mean various things: products that last longer or work better, better after-sales or technical support or friendlier and better service.
In a competitive market, businesses will try to make their products different from the rest. This results in greater choice – so consumers can select the product that offers the right balance between price and quality.
To deliver this choice, and produce better products, businesses need to be innovative – in their product concepts, design, production techniques, services etc.
Better competitors in global markets:
Competition within the EU helps make European companies stronger outside the EU too – and able to hold their own against global competitors.
(List from: European Commission)