ABSTRACT
This chapter argues that water markets are prone to fail and competition law should be imposed to correct their inefficiencies. Water markets have been defined as transactions where the value of water is different from the value of land and improvements, where buyers and sellers act voluntarily, and prices are negotiable between buyers and sellers. Water markets may adopt different structures, such as agricultural markets, inter-basin markets and inter-sector markets. The water law tends to address those broad concerns by adopting different public policy strategies. The importance of competition law in water markets stems from the fact that unregulated or even regulated markets may not be efficient if firms have market power. The requirement for a water market is to have a defined unit of raw water in bulk. Completely specified and enforced so that all individuals know the privileges and restrictions associated with holding a water right and the penalties for their violation.
