Competition policy of UK: Competition policy means those policies which are formulated to prevent and reduce monopoly power of businesses in the economy. There are two types of behaviors adopted by the businesses collusive behavior and Abuse of market power. Competition policy is working to reduce these behavioral practices. Competition policies are used to improve the competitive environment so that consumers can fulfil their needs. Competition law of UK is affected by both British and European elements. Five competition policies are helping in improving the competitive process includes:
UK government prohibits those agreements and practices which restricts free trading and competition between business entities. UK government remove the cartels. Cartels are agreement between buyer and seller to control prices or exclude entry of new competitors in the market. Cartels are removed because it gives rise to oligopolistic industry.
Removal of predatory prices is the strategy used in UK. Predatory pricing is a risky pricing strategy where prizing of a product or service is set very low by the companies to drive competitors out of the markets or create barriers to entry for new entrants.
Provisions are made for removal of Price gouging is another strategy used by UK government. Price gouging means where seller increases the prices of goods and services in such a higher level than they actually have and exploit consumers.
Removal of the strategy of refusal to deal is another plan implemented under the competition policy of UK. Sometimes the refusal to deal may consider unlawful anti-competitive practices which results reduction in competition in market.
UK government go for supervising the mergers and amalgamations including joint ventures, because these transactions are considered to threaten the competition in the market.
Greenery, JhonLewis partnership, Stemcor Swire and Palmer and Harvey are some of the largest companies of UK which are affected with the competition policy norms. Due to these norms competitive environment increases and prices of the products are under the control. These provisions also remove market denomination.
Competition policies and regulations are required to be considered by the organizations that operate business in UK market place. As per the regulation, Walmart supermarket is required to consider Office of Fair Trading for the purpose of protecting the consumers and other competitive forces in Britain. Further, the policy also ensures that market work well for consumers by ensuring fair competition and trading. Walmart supermarket has been considering this act and this assists in managing all the business entities in adequate and legal manner. Further, Competition Commission is also followed up by Walmart supermarket which is a public body and which assists in managing investment for mergers and other strategic purposes.
Considering such act assist the business entity to facilitate healthy competition among all the same companies. On the other hand, norms defined by the European Commission are also followed since it upholds treaties to manage day to day business activities. Hence, healthy competition is being managed in retail industry of UK and as result; all the competitors are working in ethical way. Walmart supermarket seems to follow Civil Aviation Authority where in the business entity needs to consider all aspects of civil aviation so that aspects related to transportation processes can be properly managed. These rules and regulations are strictly affecting Walmart super market in many ways. Firm needs to comply with these rules very strictly and if it will not do so then strict action can be taken against it for non-compliance with rules and regulations.
? De- regulation:
It is the competition policy that is being adopted to reduce monopoly from the market. Merger and acquisitions are regulated by these kinds of policies aiming to reduce the monopoly from the market.
Privatization is the policy adopted to develop the economy. This economy supports the transfer of ownership.
? Laws on anti- competitive behavior:
This competition policy is developed to introduce fair deals in the market. There are certain legislations that are introduced to ensure that price fixing and other type of unethical practices could get reduced from the market. Breaching the law in UK by the companies leads them to pay 10% of the world turnover and imprisonment to the senior executives.
? Import tariff reduction:
It helps the businesses to import the products and services on lower price rates as taxes get reduced to help the companies to grow in the market.
? Market Liberalization:
Market liberalizations are the competitive policy in which industries facing monopoly are being managed.
Monopoly is being faced by the supermarkets of UK. Due to some of the big firms like Wakmart industry was feeling dominated. Small retailers available in the market were getting affected because these firms are regulating the businesses since 2012. Monopoly started getting reduced after emergence of Aldi and Lidl. With the help of OFT monopoly got reduced which helped other retailer in the market.