Competition

• There are Policies About Competition
• Fair competition

  • Businesses are motivated to provide good quality products for reasonable prices
  • Customers will simply go elsewhere if they don't
  • Competition encourages businesses to innovate and develop new products
  • Competition provides customers with choice by product differentiation
• Competition policies

  1. Encourage fair competition

  2. In the UK, the Competition Act 1998 sets out the laws on competition and what constitutes unfair business practices

  3. The Competition and Markets Authority (CMA) prevents businesses breaking competition laws

  4. EU competition law regulates competition across the EU

  5. Businesses breaking these laws can be given big fines or be criminally prosecuted
• Businesses need to understand competition laws so they don't break them and also so they can watch out for competitors breaking them - they'd want to report them so the authorities could investigate
• business cant conspire with competitors to limit production so that high prices can be charged due to a shortage
• business cant divide up market