chapter  14
10 Pages

Competition Policy

Competition policy refers to a set of laws and regulations aimed at maintaining

a fair degree of competition by eliminating restrictive business practices by pri-

vate enterprise. According to Graham (2000, p. 205), competition policy includes

‘both anti-monopolies (antitrust) and regulation of state aid (i.e. subsidies and

subsidy-like measures)’. Restrictive (or anticompetitive or unfair) business prac-

tices are those that limit entry into a market by other enterprises or regulate sup-

ply in a way deemed harmful to other (existing or potential) producers or to

consumers. Such practices include collusion, predatory pricing behaviour, capac-

ity expansion that deters market entry and mergers and acquisitions that reduce

competition.