ICAEW BIP · Chapter 10 · Question 4 of 10
What is the main purpose of competition regulation, such as the powers given to a national competition authority?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) To prevent anti-competitive behaviour, such as cartels and abuse of a dominant market position, that would harm consumers
Explanation
Competition regulation aims to keep markets competitive, for example by investigating mergers, prohibiting price-fixing cartels and stopping dominant firms from abusing their market power. This protects consumers through lower prices, choice and innovation. Protecting domestic producers from imports is protectionism (such as tariffs), not competition policy.
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