The document discusses monopolies and anti-competitive practices legislation in the UK and EU. It outlines how the UK and EU aim to restrict monopolies through acts like the Competition Act 1988. The Competition Commission/Competition and Markets Authority regulates monopolies and mergers in the UK and investigates anti-competitive agreements and abuses of dominant market positions. Exemptions may be made for potentially anti-competitive practices under EU law if they increase business activity and efficiency.
2. Introduction
The UK tries to prohibit the monopoly and anti-
competitive practices as a monopoly is a great
threat to any economy (Abbott, Pendlebury and
Wardman, 2013). Again, The competition
commission has taken various measures to
restrict the monopolies and anticompetitive
behavior. The potentially anti-competitive
practices may become competitive with the
promotion of EU law, exemptions.
3. 3.1 Outline and explain the monopolies
and anti-competitive practice legislation
in the UK
A company having 50% of the market share of a
particular industry is monopolistic as it holds more
market share. A monopolistic company can cause a
price hike, for example, British Telecom creates a
monopoly as it holds more market share. The
monopolistic companies exploit the consumers by
charging a higher price on the product. The price of a
particular product is determined by the supply and
demand conditionality in the case of a normal market.
But in the monopolistic economy, the companies
charge a higher price.
4. 3.1 Outline and explain the monopolies
and anti-competitive practice legislation
in the UK
In order to restrict monopoly in the UK, different acts have
been enacted. The related laws are competition act 1988,
fair trading act 1973, monopolies and merger act 1965.
Competition commission act 1988 is regulated by
competition commission in the UK. From April 2014 it
becomes the competition and market authority to
accelerate the operation of the commission. It restricted
the anti-competitive practice held in the market. It
facilitates the effective functioning of fair trading.
The competition act 1988 has been developed to forbid
the monopoly and competitive practices (Smith and
Baumann, 2011). It will restrict the competitive advantage
of the companies. This will also lead to improved efficiency
and quality goods which will make the economy better.
5. 3.2 Explain the role of the Competition
Commission within the context of
monopolies and anti-competitive
practices
The competition commission has taken various measures
to restrict the monopolies and anticompetitive behavior.
The name of the commission has been changed to
Competition and market authority in 2014 in order to
speed up and broaden the activities of the commission. In
order to make the legislation resilient, treaty of Lisbon has
been included in the legislation.
It deals with issues referred to it by the office of fair
trading. It promotes competition by undertaking measures.
Its main goals are to promote fair competition and
empower the customers by giving them the product at
reasonable price. It uses the market regime to develop the
way of competition.
6. 3.2 Explain the role of the Competition
Commission within the context of
monopolies and anti-competitive
practices
It ensures whether the rules and standards are maintained
accordingly. It also looks at merger to assess whether these
mergers are in favor of public interest. If they can assess that
the merger will compromise the competition, they will take
necessary steps to stop this merger or request for
modifications. In order to investigate the main objectives of the
merger, they will consider the factors like market share of the
new firm, local monopolies, economies of scale in industry and
importance of research and development. It also investigates
whether there is any breach of UK or EU prohibitions against
anti-competitive agreements and misuses of dominant
positions.
7. 3.3 Define dominant positions within the
EU common market giving examples of
such businesses
According to article 102 of the treaty law, the firm
who is holding 50% share in the market will be the
dominant position in the market. The EU common
market is a place where various dominant positions
exist (Gov.uk, 2017). The dominant position is that in
which dominant companies abuse the consumers by
charging a higher price of the product. A company
having dominant position can restrict the competition
by its monopolistic behavior.
8. 3.3 Define dominant positions within the
EU common market giving examples of
such businesses
Generally, a dominant position is not itself anti-
competitive. But if the company exploits the position
to eliminate the position, it can be regarded as a
misuse of dominant position. The companies having
dominant positions can restrict competition by
charging unreasonably high prices, depriving smaller
competitors of customers by selling at artificially low
prices. They also can restrict competitors in the
market by compelling the consumers to purchase a
product which is made popular artificially
9. 3.3 Define dominant positions within the
EU common market giving examples of
such businesses
In order to restrict the dominant position, competition
commission has been working. To ensure the
competitiveness of the UK market, the competition
act 1998 has been enacted to control the monopoly
(Allison and Prentice, 2009). The office of fair trading
has been put the responsibility to restrict the
companies from the monopolistic activities. For
example, Double-glazing spacer bar is considered
as in the dominant position in the EU common
market because it is holding 52% of the market
share.
10. 3.4 Considering instances when under
EU law, exemptions will be made to
potentially anti-competitive practices.
The firm having more than 50% of the market is
considered as a market leader. Article 102 of the treaty
law has shown that the market leaders are very much
effective to the market factors. The name of the
commission has been given Competition and Market
Authority in 2014 for its interactivity (Law.qmul.ac.uk,
2017). The European Treaty has set the principal that the
companies can determine the price as they want in a
monopolistic market. The price of a product is determined
by the supply and demand of that product. The EU treaty
may cause a downfall in sales of the monopolistic firm in
case of overpricing.
11. 3.4 Considering instances when under
EU law, exemptions will be made to
potentially anti-competitive practices.
The potentially anti-competitive practices may become
competitive with the promotion of EU law, exemptions.
The phenomenon will augment the business activities.
Thus the efficiency of the firms will be increased. Thus the
firms will be able to make extra output. Thus the sector
will be developed with government intervention. The
policies will help to attract the potential businessman to
work in the sector. Thus they start to work in the sector.
This is why the phenomenon can increase the
competition in an anti-competitive economy. So the laws
and exemptions are needed to be applied by evaluating
the proper feasibility of them (Lloyd, 2013).
12. Conclusion
The dominant position is that in which dominant
companies abuse the consumers by charging a
higher price of the product. A company having
dominant position can restrict the competition by
its monopolistic behavior. The potentially anti-
competitive practices will augment the business
activities. Thus the efficiency of the firms will be
increased. Thus the firms will be able to make
extra output.
13. References
Abbott, K., Pendlebury, N. and Wardman, K. (2013). Business law. 1st ed.
Andover: Cengage Learning.
Smith, L. and Baumann, I. (2011). Contracting for space. 1st ed.
Farnham, U.K.: Ashgate Pub.
Gov.uk. (2017). Company law reform - GOV.UK. [online] Available at:
https://www.gov.uk/government/policies/company-law-reform [Accessed
14 Apr. 2017].
Law.qmul.ac.uk. (2017). LLM Commercial and Corporate Law. [online]
Available at:
http://www.law.qmul.ac.uk/postgraduate/courses/items/138021.html
[Accessed 14 Apr. 2017].
Lloyd, I. (2013). UK: New Directions in UK Copyright Law. Computer Law
Review International, 14(3).
Allison, J. and Prentice, R. (2009). Business law. 1st ed. Austin, Tex.:
University Co-Op.