COMPETITION POLICY AND ITS IMPORTANCE FOR THE ECONOMY

Abstract

The article analyzes and discusses topics such as competitition and it’s importance for markets. Competition is a cornerstone of our economic and social order. The fact that competition leads to the best overall economic results is now undisputed in most economies around the world. Effective competition encourages businesses to push forward. They must make an effort to win customers. As a consequence, consumers can benefit directly from better quality at lower prices. Competition Agencies increased the effectiveness of their cartel prosecution efforts, for example by establishing specialized anti-cartel divisions, revising their leniency programme and lauchinannonymous whistle-blowing system. High-level fines can only gave a deterrent effect if the cartel members have reason to expect that their cartel activities will be uncovered. The leniency programme as one of the sources available for  uncovering anti-competitive agreements this also has a strong deterrent effect. Cartel members must expect at all time that one of them might have reported the illegal agreements to the competition authorities. The prosecution of illegal hardcore cartels^[1] is of key relevance for effective competition protection and, as such, has a direct positive effect in the economy and costumers. Cartels cause great harm to the economy because they lead to higher prices, lower product quality and less innovation. This harm can only be prevented if cartels are effectively prosecuted. Also, anti-competitive agreements lead to excessive prices coupled with inferior product quality. At the same time the elimination of competition undermines the innovative power of businesses.Cartels thus hurt the economy as a whole and the consumer in particular. The motivation to study competition policy and its importance for economy is step to introduce more economic possibilities and partnerships in our developing world.

Keywords

• Competition policy,economic order,social order

References

1. OECD, Guide for helping competition authorities assess the expected impact of their activities, April 2014 (available at: www.oecd.org/competition/guide-impact-assessment-competition-activities.htm)
2. The ECN Leniency Programme is available here: http://ec.europa.eu/competition/ecn/mlp_revised_2012_en.pdf https://www.westeastinstitute.com/wp-content/uploads/2016/12/Giorgi-Benashvili-Nika-Asanidze.pdf Connor, John M., Global Price Fixing, Berlin 2008, p. 338.
3. Cf. Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, Official Journal L 1/1 of 4 January 2003.
4. Competition and growth: how can government policy help?’ - http://www.oft.gov.uk/news-and-updates/speeches/2011/1511
5. Laitenberger, Ulrich and Smuda, Florian (2015): Estimating Consumer Damages in Cartel Cases, Journal of Competition Law & Economics 11 (4), 955–973.
6. Nickell (1996), ‘ Competition and Corporate Performance’, Journal of Political Economy OECD (2007a), ‘Competition Assessment Toolkit’, www.oecd.org/dataoecd/15/59/39679833.pdf