Economics - PPTTT

GOVERNMENT
REGULATION
OF
COMPETITION
The federal government has policies,known as antitrust laws,
to keep firms from gaining too much market power. The
Federal Trade Commission and the Department of Justice’s
Antitrust Division watches firms to make sure they don’t
unfairly force out competitors.
Actions government can take to prevent anti-competition
➔ Promote Competition
➔ Limit Monopoly power
➔ Protect consumer interests
➔ Control mergers and takeovers
Promoting Competition and limiting monopoly power
The government may encourage small firms to join markets. Some countries
have taken measures to support small firms and firms joining a market by
providing funds and lowering their taxes.
Legal barriers can be lowered or removed so it’s easier for any firm to join a
market so there is more competition
As for monopolies, if they exist and there is no government intervention they

might exploit consumers by raising prices or not providing quality standard.
For this reason there are appointed bodies in countries to monitor
monopolies and issue fines to those who are exploiting consumers
PROTECTING CONSUMER INTERESTS
Consumer interests can be protected by providing them quality goods
and a reasonable price. Some organisations exploit consumers by -
➢ Price increases that are greater than they would be in a competitive
market.
➢ Price fixing is a practice in which a group of companies agrees to set the

price of a commodity in order to prevent price competition.
➢ Market sharing restricts customer preference.
➢ By investing a lot of money on ads, you can raise the barriers to entry.
➢ And, for example, smaller businesses could not match.

WHAT THE CONSUMER WANTS?
In terms of product consistency.
1. The consumer's substantive needs must be measured against his adversary's
substantive needs, which are both true in the abstract.
2. The consumer's substantive interests should presumptively win out over
competing money demands that go beyond the bare minimum of price
concessions that might be required to make any profit-motivated economic
system workable.
THE UAE TAKES MEASURE TO PROTECT
CONSUMER INTERESTS
Since the UAE is the hub of business in the Middle East, the government has taken a
range of measures to protect customers. The government has taken these steps in order to
boost consumer trust and ensure that business practices remain fair.
The Federal Law Number 24 of 2006 governs consumer protection in the United Arab
Emirates, as well as the enforcement of the provisions.
The Consumer Protection Department's duties are outlined in Article (4) of Federal Law Number 24 of
2006, which states:
"A Department called the "Consumer Protection Department" will be established at the Ministry." The
following are the duties of the Department:
1-Supervise, in collaboration with the appropriate agencies, the application of the general
consumer protection policy.
2-To tackle illegal trade practices that affect customers, cooperate with relevant authorities
in the UAE.
3-Coordination and collaboration with relevant authorities in raising consumer awareness

of UAE goods and services, as well as educating consumers on their legal rights and how
to enforce them.
4- In order to keep inflation under check, keep an eye on price and currency movements.
5-Encourage open competition and eliminate monopolies.
6-Consumer complaints about processing are received and referred to the appropriate
authorities. Complaints can be filed by the consumer directly or by the Consumer
Protection Association on his behalf.
7-Decisions and recommendations that promote consumer awareness should be published.

MERGERS AND TAKEOVERS
A merger is an agreement that unites two existing companies into one new
company. There are several types of mergers and also several reasons why
companies complete mergers. Mergers and acquisitions are commonly
done to expand a company's reach, expand into new segments, or gain
market share.
Control mergers and takeovers
Governments frequently monitor mergers and takeovers to

ensure that markets remain competitive. Mergers and
takeovers usually lead to a reduction in market competition.
As a result, government agencies are likely to investigate
large mergers or takeovers. If certain conditions are met,
they may be blocked or allowed to proceed.
Mergers and Takeovers in The UAE
Higher Prices. A merger can reduce competition and give the new firm monopoly
power. With less competition and greater market share, the new firm can usually
increase prices for consumers. ...
● Less choice. A merger can lead to less choice for consumers. ...
● Job Losses. A merger can lead to job losses. ...
● Diseconomies of Scale.
The UAE Competition Law and Regulation prohibits the companies of a dominant
position in the relevant market, or in a substantial or inﬂuential part thereof, from
carrying out any acts or actions that lead to the abuse of the position in order to
prejudice, restrict or prevent competition.
The Competition Law and the Regulations establish a comprehensive regime of both
merger control and prohibitions on anticompetitive agreements and abuse of a dominant
position. Responsibility for enforcement lies with the Competition Department of the
Ministry of Economy, supported by a Competition Regulation Committee, chaired by
the Undersecretary of the Ministry of Economy.
Merger control clearance is required for transactions that result in the acquisition of
direct or indirect control through total or partial transfer (through merger or
acquisition) of ownership or benefit in assets, equity, shares or obligations from one
entity to another.
THANK YOU
ZEHRA10C

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GOVERNMENT

As for monopolies, if they exist and there is no government intervention they

➢ Price fixing is a practice in which a group of companies agrees to set the

➢ Market sharing restricts customer preference.

➢ And, for example, smaller businesses could not match.

3-Coordination and collaboration with relevant authorities in raising consumer awareness

5-Encourage open competition and eliminate monopolies.

7-Decisions and recommendations that promote consumer awareness should be published.

Governments frequently monitor mergers and takeovers to

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