Competition Policy and Regulation

1
Competition Policy and Regulation

• TCA Anant
• Department of Economics
• Delhi School of Economics

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.

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!

4
Competition and Regulation

• Case Study Professions
• Idiosyncratic, Skill Based, Skill is embodied in
  People
• What is the problem?
• Information
• Externalities
• So Self 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

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

7
Problems..2

• Convergence and Regulatory Coverage
• Railways and Telecom
• Power and Telecom
• Banks and Financial Markets
• Capture
• Technical Focus

8
But

• We need Sectoral Regulators
• We Need a Competition authority
• SO

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

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

11
The Work goes on.

• Comments welcome
• anant_at_econdse.org

12
(No Transcript)