Question

Some countries’ competition and antitrust policies are pro-competition and pro-consumer, whereas other countries’ policies are pro-incumbent and pro-producer. How do they differ? Which policy seems better to you?

Answer 1

I don’t see any difference in both type of policies and both policies seems to offer the same outcomes. The both policies are designed to combat monopolies and cartels. They seek to balance efficiency and fairness. Here efficiency stands for to remain productive and fairness to have equal opportunities for new competitors and incumbents. For example, in America prices are not fixed for the incumbents and have entry barriers to close new competitors. Whereas, Japan is unlike America where incumbents invest in the industry to remain protected from the new competitors. Hence, Americans termed this as “market dynamism” or “collusion” but Japanese called this as “market turbulence” or “orderly competition”. Therefore, it is difficult to say how they differ and because of the robust antitrust laws, Americans have tough competitive forces as compared to developed nations. For the same goods, Japan has higher prices i.e. “predatory pricing” (on an average as compared to the America i.e. “collusive price setting”).