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Competition Policy and Regulation

This article discusses the importance of competition policy and regulation in various sectors such as telecom, financial services, and professional services. It covers topics like market failure, entry conditions, pricing, conduct rules, and the role of sectoral regulators. The article also explores the challenges and conflicts faced by regulators and the need for cooperation between regulators and competition authorities.

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Competition Policy and Regulation

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  1. Competition Policy and Regulation TCA Anant Department of Economics Delhi School of Economics Funcomp: Regulation

  2. Why Regulate • Market Failure • Telecom: Network Externalities • Financial Sector: Systemic Stability • Professional Services: Information • Instruments of Regulations • Entry Conditions: Insurance, Power, Professional Services, Banks… • Pricing: Telecom • Quantitative Restrictions: Environmental Regulation • Conduct Rules…. Funcomp: Regulation

  3. Competition Policy • What is Competition Policy • Market Oriented • Theory Based • Mostly about Conduct • Though Mergers analysis deals with structure • The Key difference is one of focus and Objectives • Obectives of Regulators! Funcomp: Regulation

  4. Competition and Regulation • Case Study Professions • Idiosyncratic, Skill Based, Skill is embodied in People • What is the problem? • Information • Externalities • So Self Regulation Funcomp: Regulation

  5. Areas of Concern • Entry • Source of Training • Requirements of Qualification • Organizational Restriction • Behaviour Restriction • Advertising • Pricing • IS “IT” MORE BURDENSOME THAN NECESSARY • Assumptions • Medicine: Doctor patient • Law- Litigation • Implication regulatory Gap • Capture Funcomp: Regulation

  6. Let us return to the Larger Issue: So what are the Problems • Conflict in Objectives • Pricing Formulae • Access Deficit Charge • Overlap in Mandates • RBI clears mergers of banks • DOT would need to approve merger of telecom companies • How will they proceed? Stability Coverage or Competition Funcomp: Regulation

  7. Problems…..2 • Convergence and Regulatory Coverage • Railways and Telecom • Power and Telecom • Banks and Financial Markets • Capture • Technical Focus Funcomp: Regulation

  8. But • We need Sectoral Regulators • We Need a Competition authority • SO Funcomp: Regulation

  9. To Summarize • Cooperation between Regulators and CA • Forms of Cooperation • Different Models • Level of Cooperation • Implication for Structure of authority • Sectoral authorities should make competition assessment a part of their overall dialogue with stakeholders . • The advocacy and suo-motu powers gives the CA the power and obligation to explain their concern to the regulator Funcomp: Regulation

  10. Some other issues • Domain of Competition • Local, Regional National International • Conflict with public Policy • Employment • Environment • Embedding the authority in the constitutional doctrine • Leniency • Criminal Sanction • The Judgment Proof Problem Funcomp: Regulation

  11. The Work goes on…. Comments welcome anant@econdse.org Funcomp: Regulation

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