Open Access Research Article
Competition Law: Conceptual And Theoretical Background (By Eshita Pallavi)
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Article Details
Since the
classical liberal teachings of John Locke, the capitalist economic system has
focussed on the correlation between competition and economy[1]. This was further advanced by the free market theory by Adam
Smith[2]. Economic and political change with respect to competition
and market helps to evaluate goals of competition and thus, the need to
determine competition policy as well as the extent of state intervention
in the market.
The purpose of antitrust law, according to the
traditional concept, is to ensure the right of the market players to
compete. The reasoning behind this is that freedom to compete contributes to
innovation and to economic and social welfare. This is also the end goal of
modern economic approach to competition law. A careful analysis of the existing
theories suggests that the primary objective of competition policy is to
enhance consumers’ welfare by favouring the development of competition on
markets[3]. The goals of antitrust policy can be traced through the
very core activities that it tends to prevent or prohibit, such as, entry and
exit barriers, abuse of dominant position, formation of cartels, etc.
The role of the State in intervening markets has changed
over the time as from being not involved at all to having a complementary role
in stabilizing the economy and the same is evident from the legal policies
regarding competition law and its enforcement. At present, the government
controls the market to an extent that it has an obligation imposed under the
social contract to protect the larger public interest involved. This is done by
the formulating policies that are based on the idea that perfect competition is
the goal and since it is not possible to achieve the same in reality, the State
aims towards what is known as a ‘workable competition’.
The standards of perfect competition are actually also
evolving[4]. A variety of evolutionary competitive principles have been
identified in contemporary innovation economics[5]. Such principles find
competition to be a dynamic process of creativity and adaptation[6] or a process of
parallel development that generates information[7]. This viewpoint
strongly criticizes the perfect competition model as an ideal competition type[8]. As in the words of Hayek, “the problem with perfect
model competition is that with its knowledge assumptions, it already
presupposes the knowledge that is generated through the competition processes”[9].
Nevertheless, all the theories advocate for one common
goal of competition, that is, maximum efficiency of the market. The State is
the custodian of market economy at present and given the public policy
considerations involved in competition, the efficiency is to be achieved by
government intervention in the form of regulatory authorities and by public
enforcement of the competition laws. Thus, one can conclude that the
implications of competitive market on consumers makes it essential to place
competition laws under the domain of public laws. However, the economic
theories transcend the distinction between public and private enforcement and
focuses on effective implementation of the policies for a successful economy.
In view of this fact, one needs to see if this goal can be achieved only
through public enforcement or is there a scope for accomplishing better results
through private enforcement of the antitrust policies.
Article Information
Competition Law: Conceptual And Theoretical Background (By Eshita Pallavi)
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- Journal IJLRA
- ISSN 2582-6433
- Published 2022/04/21
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
- Access Open Access
- License CC 4.0
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