New Society: regulation
The government attempts to prevent anti-competitive practices – operations that are against the public interest. Competition policy is one of the pillars of the internal market and competition law and regulation should protect competition by controlling the operation of firms that may have monopoly power in their own industry, as this may lead to consumers being exploited. Markets work best when there is a healthy rivalry between companies and they compete to serve active and informed customers who want and are able to reward good performers and withhold reward from those who don’t measure up. .
Law should make monopoly and oligopoly impossible, and should encourage new market entry, wider choice, lower prices and higher quality. Regulation is designed to deal with the problem of market failure – where markets fail to reach an optimal allocation of resources. However, as Phillip Blond points out, many interventions by regulators have had perverse consequences, including market concentration, with a shrinking number of competitors, further increasing the possibility of a monopolist or semi-monopolist control of the market. This means that the market becomes further and further removed from free and genuine competition.
How can we create the competition policy and regulation – with a proper accountability structure – that the UK needs for growth, innovation and the widening of ownership and prosperity? With UK communications regulation under the spotlight in 2012, there is a chance to review the entire media regulation framework.