Competition Policy  

Competition policy is the structures governments have in place for the regulation of markets and monopolies. Competition policy generally aims to:

  • Prevent growth of Monopoly power
  • Prevent abuse of Monopoly power and restrictive trading practices
  • Investigate suspected abuses of monopoly power and recommend policy decision.
  • Reduce barriers to entry and keep markets contestable.

Competition Policy Agencies

In the UK, there are 2 main government bodies responsible for Competition Policy

  1. Office of Fair Trading. (OFT) responsible for investigating abuses of monopoly power. Has the power to refer potential mergers to Competition Commission for investigation
  2. Competition Commission. Looks at mergers to see whether in public interest. Can also investigate certain industries. Competition Commission

On some occasions governments have encouraged self regulation. i.e. industries agree to regulate themselves knowing that failure to deal with problem will lead to government intervention.


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