Regulation

• Give examples of regulators:

  • CMA - competition & markets authority
  • Ofwat - water
  • Ofgem - energy
  • Office of Rail and Road - rail and road transport
• What can regulators do intervene?

  • Monitoring & regulating prices
  • Standards of customer service
  • Opening up markets
  • The ‘surrogate competitor“
• Give details about how regulators monitoring & regulating prices can help:

  Regulators aim to ensure that companies do not exploit their monopoly power by charging excessive prices.
• Give detail about how regulators providing standards of customer service can help:

  Companies that fail to meet specified service standards can be fined or have their franchise/license taken away.
• Give detail about how regulators opening up markets can help?

  The aim here is to encourage competition by removing or lowering barriers to entry. This might be achieved by forcing the dominant firm in the industry to allow others to use its infrastructure network. A key task for the regulator is to fix a fair access price for firms wanting to use their existing infrastructure.
• Give detail about how the “surrogate competitor“ can help as a form of regulation?

  Regulation can act as a form of surrogate competition - attempting to ensure that prices, profits and service quality are similar to what could be achieved in competitive markets.