Competition Policy

Competition policy is a type of public policy that ensures to maintain the competition within the market or undermines in any ways which are detrimental to the economy of the country and the society of humans. Competition policy also plays a very important role in predicting the idea that competitive markets are central to growth, investment, innovation, and efficiency. Competition policy also helps to put companies or large industries under constant pressure which help to offer the best possible range of goods and services at the best possible prices to the consumers. Business should be like a competitive game in the market where consumers act as the beneficiaries.

There are three main areas that are covered by competition policy which are as follows:

• Restrictive Practices

Restrictive practices are controlled by competitor firms to fix the prices of the goods and services. It is very important for the largest multinational firms to collaborate with competitors in areas such as research and development

•  Monopolies

It is the abuse of a monopoly position that is addressed through policy. The regulation of utilities helps to transfer the large numbers of state-owned utilities into the private sector which provide the benefits of economies associated with a monopoly network provider

• Mergers

Mergers are one of the most controversial and consequently areas of competition policy. There always has been a controversy whether a particular merger will result in a damaging reduction in the competition of prices without any potential benefits

Commission

The commission is the body or regulatory authority which helps to preserve the well functioning of the markets and also prevent and correct anti-competitive behaviours

Competition Commission of India (CCI):

Competition Commission of India is abbreviated as CCI. It was formed on 14th October 2003. It has access to all ranges of goods and services. With the increase in competition, producers can generate maximum incentive to innovate and specialize. This would help to reduce the costs and provide wider choices to consumers. Fair competition in the market is very essential to achieve the objective of the competition commission. The main aim of the competition commission of India is to create and sustain fair competition in the economy of the country which provides producers to make the markets that work for the welfare of the consumers. Competition Commission of India mainly consists of chairperson and members who are appointed by the central government. The chairperson of the competition commission of India is Ashok Kumar Gupta.

Dr Sangeeta Kumar and Bhagwant Singh are the members of competition commission of India.

Role of Competition Commission of India:

The main role of the competition commission of India are as follows:

• The duty of the competition commission of India is to prevent practices that have adverse effects on competition and to promote & sustain competition in order to protect the interests of consumers and provide freedom of trade in the markets of India
• The competition commission of India also gives an opinion on competition issues received from a statutory authority which is established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues
• Competition Commission of India is also responsible to enforce the competition act, 2002 throughout India

National Competition Policy:

The national competition policy of India is formulated by the government of India. The main aim of the national competition policy is to achieve a high employment rate, high economic growth, standards of living for the people of India, entrepreneurship, protect economic rights, social development and promote economic democracy and support good governance by restricting rent-seeking practices.

Competition law and policy:

The competition act which was introduced in the year 2002 was amended by the competition amendment act in 2007 which mainly deals with the philosophy of modern competition laws. The act helps to prevent the anti-competitive agreements and abuse of dominant position by large companies. This act also regulates the combinations of acquisition and acquiring of control which causes an appreciable adverse effect on competition within the country.

Advantages of Competition policy to Consumers:

There are numerous benefits of competition policy with respect to consumers which are as follows:

• Upgradation

The companies upgrade their product as well as innovate on a regular basis. If there was no competition in the market, there would be no innovations. So, upgrading is a very beneficial advantage of having market competition

• Adding more value

The main advantage of competition policy is that companies are always trying to add more value to their product. At every step, they try to increase the quality of the product or decrease the prices. In both cases, the products become more effective and desirable to the customers

• More options for customers

Due to competition policy, the customers get various more options that are available in the market. When competition is strong in the market, various companies such as Samsung offer various options to the customer

• Productivity

Businesses tend to be more productive and efficient due to the competition policy in the market. For example, In case, your competitor is making and modifying their strategies on a regular basis then you will also optimize your operations and manufacturing. Due to this reason, customers get better customer service and optimized products. This is one of the biggest advantages of market competition

• Focus on sales and customers

The best advantage of market competition is the company primarily focuses on sales and on its customers. More customers mean more market share. However, when a company starts losing its market share, then competitors can have an advantage. If there will be no competition, then the company would not be worried about sales or market share

Benefits of Competition policy to Businesses:

Competition policy not only benefits consumers but also businesses in various ways:

1. Competition in the market helps businessmen to think more innovatively which can be beneficial for the growth of the business.
2. If there will be no competition in the market, then the companies might not focus much on the quality of service. The product might be boosted in the market but customers are not actually satisfied with your service.
3. If there is high competition in the market, the companies get better information about customer preferences or requirements.
4. To stand out from the competition, the companies always need to be highly motivated.