“Discuss the relationship between EU competition policy and consumer interests with particular reference to the economic assessment of markets.”
In this academic essay I will investigate various sectors both private and public that have been affected by of EU competition policies that focus on the consumer interests while considering the market. I will outline one case the was taken to Irish courts to enforce the competition authorities’ policies and one that was dealt with by the EU.
“Competition in markets in generally a good thing” (Purcell, 2010)
Consumers benefit when there is fair competition in a market. Consumers get high quality products, have better choices and get greater value for money. Innovation is encouraged in a competitive market place as it is a method used to gain market share and each competitor wants to maintain or grow their market share. Competitive markets generally support long term economic growth.
Competition Authority (CA) was set up to promote competition and tackle anti-competitive practices. The CA “enforces Irish and European competition law” (TCA, 2012). They also help to increase people’s awareness of anti-competitive practices such as price-fixing. The CA’s mission statement “to ensure competition works well for Irish consumers, business and economy” highlights that a competitive market doesn’t only benefit the consumer.
During the 2000’s due to numerous criticisms the modernisation of competition policy arose which covered various topics such as; decentralization, self assessment and the European Competition Network.
There are four main areas in the EU’s Competition Policy.
“Antitrust enforcement, incl. the enforcement of prohibitions against cartels and the abuse of market dominance (monopolies, oligopolies),
Merger review and control
State-owned enterprises and special relationships between states and firms, such as government-granted monopolies for postal delivery, IT service provision, etc., and
State aids, that is, public subsidies to private or public firms, including loans and grants but also tax breaks, as well as goods, services, or financing made available at preferential rates”
(Buthe T, 2005)
The Commission doesn’t have the same level of nominal and actual power in each of the four areas; playing a significant role in mergers and much lesser in terms of state aid.
Rory O’Donnell (2000) pointed out that the internal market caused a radical change in public utilities but to what extent has this actually occurred? Furthermore has there been a significant overhaul going from a monopoly to a competitive market?
One area that has successfully become a highly competitive market is telecommunications with main competitors such as; Vodafone, O2, Meteor and Three constantly battling with better price plans and packages for consumers which have transformed the market with a standard packages including free texts and free calls. Their performance for reception in rural areas and internet connectivity and has been beneficial for consumers and the quality is always creeping upwards. This began back in 1993 when explicit state aids were outlawed which directly affected Telecom Éireann (Europa, 2012).
Electricity has saw the historically monopolistic market become fully deregulated in the Irish market (geographically) as it met requirements such as having at least 3 suppliers with each having at least 10% of market share. The entry of Bord Gáis Energy and Airtricity gives the Irish consumer a choice for who they buy their electricity from and with a switching rate of over 20% from February ’10 to January ‘11 it is clear that consumers are embracing the competitive market. However the electricity supply network is still owned and operated by ESB. Since 2011 the Commission of Energy Regulation (CER) no longer sets the ESB Electric Ireland prices on the condition that ESB drop the ‘ESB’ in the brand name to “remove confusion” between their...
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