Business Environment EDEXCEL Course WK 5 Competition Policy and Regulatory Mechanisms

1. Business Environment
Week 5
Competition Policy
And Regulatory Mechanisms
Dr Shohail Choudhury
Photo Credit: http://www.enerpro.eu.com
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2. Learning Outcome
LO2: Understand the nature of the national environment in which
businesses operate
2.2: evaluate the impact of competition policy and other regulatory
mechanisms on the activities of a selected organisation
Course Content
competition policy (up-to-date legislation including Competition Act 1998,
Enterprise Act 2002); Competition Commission, Office of Fair Trading;
Directorate General for Competition); European Commission); sector regulators
eg Ofgem, Ofwat, Civil Aviation Authority; Companies Acts; regional policy;
industrial policy; enterprise strategy; training and skills policy
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3. Today’s Lesson Plan
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4. What is competition?
The degree to which a market or industry can be
described as competitive depends in part on:
• how many suppliers are seeking the demand of
consumers
• the ease with which new businesses can enter and
exit a particular market in the long run.
Highly competitive markets is where there are many
sellers
Pure monopoly where a market is dominated by one
single supplier

5. Monopolies etc
• Monopoly where a market is dominated by one single supplier.
Pure
Working
• Oligopoly - where a few producers
dominate the majority of the market
and the industry is highly concentrated.
• Duopoly is where two firms dominate the market
although there may be many smaller players in the
industry.

6. Video: Royal Mail Sell Off
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7. Activity on Video: 5 mins
• Changes in Policy can impact on competition.
• How privatisation of Royal Mail will impact
competition?
• Discuss in pairs and present to the class.

8. COMPETITION AND LEGISLATION

9. • UK competition agreements between companies
function to protect the consumer.
• This protection is embedded into five Act of
Parliament in the UK.
• The EU has a Commissioner who works to ensure
that all countries enforce competition law and that the
laws are fair and barriers to entry are reasonable.

10. NHS: 5 Principles of competition
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11. Debate
Is competition good for
patients service?
• Declare whether you are for or against the
proposition
• Each participant will get 2 mins.
• 1 for, then 1 against.
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12. Video: Is competition good for the NHS
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13. Activity: Research and Presentation
Time: 20 mins
• Library – teams of 4
• Go to library and use internet.
• Each team member will identify an unique piece of
information on the following Acts.
• 5th one done together by all team members will be a paragraph
on it.
» The Fair Trade Act 1973
» Restrictive Practices Act 1976
» The Competition Act 1998
» The Resale Price Act 1976
» Treaty of Rome – Articles 85 and 86

14. Regulatory Bodies
• The Competition Commission (1998) replaced the
Monopolies and Mergers Commission.
• Usually cases for investigation are referred to the
CC by the OFT or the Secretary of State. Is this
merger against public interest?
• OFT was established by the Enterprise Act 2002
as an independent professional organisation.

15. Reading Material: CC
• Check your moodle for a reading material on
competition commission
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16. Video: OFT for consumer rights
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17. From OFT’s Website
• The OFT's mission is to make markets work well for
consumers. Markets work well when businesses are in open,
fair and vigorous competition with each other for the
consumer's custom. Our job is to make sure that consumers
have as much choice as possible across all the different
sectors of the marketplace. When consumers have choice
they have genuine and enduring power.
We pursue this goal by:
• encouraging businesses to comply with competition and
consumer law and to improve their trading practices through
self-regulation
• acting decisively to stop hardcore or flagrant offenders
• studying markets and recommending action where required
• empowering consumers with the knowledge and skills to make
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18. • As an independent professional organisation, the OFT
plays a leading role in promoting and protecting
consumer interests throughout the UK, while
ensuring that businesses are fair and competitive. Our
tools to carry out this work are the powers granted to
the OFT under consumer and competition legislation.
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19. Other Regulators
These bodies exist to protect the public interest where
there is a limited amount of competition and promote
choice in a market where suppliers are limited.
• OFWAT – Water suppliers
• GEMA – Gas and Electricity Makers
• OFCOM – Media and Telecommunications

20. Self Regulators
• PCC – Press Complaints Commission
• Portman Group – Drinks industry and
promotes responsible drinking
• FSA – Financial Services Authority was set up
by Act in 2000 to regulate financial services
industry
• BMA – Protects doctors professional interests.

21. Video: Competition in EU
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22. Assignment Help
AC2.3 Using the same organisation, you are
required to evaluate the impact of the UK
government’s policy on competition and other
regulatory mechanisms that could control the
activities of the organisation.
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23. Video: Competition in Action
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24. References
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Times 100
Tutor2U
Business Case Studies.co.uk
OFT
GOV.UK
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