Comparison of Australia and Canada Approach Competition Policy - Case Study Example

ustrаliа and Cаnаdа Аррrоасh Соmреtitiоn Роliсy By student’s name Course code +name Professor’s name University name City, state Date of submission Аustrаliа Аnd Cаnаdа Аррrоасh Соmреtitiоn Роliсy Canada and Australia have similar factors and aspects in their approach to markets and economic factors. There are temporary program and pro- competitive reforms that have taken place over the last decades in competitive policy. For example, dominance over policymaking, Coordination of governments at all levels in order to have both national and international competition policy, and the constitutional creativity in the federal structure, which acts as a political back up for market based approaches. In respect to the two countries trade policies and policy goals, it is clear that they aim at having consumer protection and fair trade in their markets (Anderson, 1998.pg 177-204). On the case of welfare there are discrepancy on its actual meaning based on consumer welfare or total welfare in regard to both the producer and consumer welfare appropriateness. Therefore, a scope and interaction between them could be subject to various interpretations. Apart from these similarities and positive approaches there are several important areas to address in regard to the competition policy between the two countries. These areas can be analyzed under the following areas. Monopolies development, exposing small businesses to stiff completion with larger companies, ensuring that customers enjoy quality products and fair prices, humanizing domestic competition, and enhancing consumer welfare’s. This paper compares the competition policy in the two countries in the above stated distinct areas (Chandler, 2000.pg 168). Competition policy In most cases competition puts many business under pressure while offering the best variety of goods at an affordable price. Therefore, a competitive game in a free market business and consumers beneficiaries should be factors to consider. Competition is an important element in all active markets. It is also an essential source of consumer benefits by, giving encouragements to enterprises, enabling consumers to purchase goods and services at fair prices, and contributing to the national competition (Stanbury, 1991.pg 87). The main aim of competitive policy in many countries is to improve the competition process and make sure that consumers benefits and feels the positive effects of that process. However, competitive law helps in the achievement of these aims, Competitive law /competitive policy This law and policy plays a vital role in the market-based economies. It ushers for an environment that gives room to a fair and free functioning of the market forces. Competitive law is also a space carve for new entrants in the markets where fetters are put on the monopolistic as well as a competitive behavior on the dominant enterprise (Norman, & Phli2000.pg 130). They also check on tendencies that are collusive, making it a law that works on the functions of consumer interests and fiscal efficiency 9 Edwards, 1976. Pg, 230). It is clear that competitive law is an indisputable function that strikes on bureaucratic balance that exists between the contradictory interest and anomalies in the socio-economic system. Precisely this competition policy or law in a variety of jurisdictions .This analysis delves into the loom adopted by countries like, Canada, Australia. The main reason for this action is to understand and compare the two legal procedures and draw conclusions on, which is more effective Analysis 1: On the case of efflorescence on economic structure that is free and fair the Australian Trade Practices Act does not allow any independent or any conduct that is collusive and that obliterates competition in the market. The act has some sections that do not permit anti-competitive agreements. These agreements may be in the type of price fixing between competitors. Agreements falls under the category of per se illegal and are deemed to reduce competition considerably. Similarly on the exclusionary provisions are also prohibited under the per se rule sections of the act. There are also prohibitions on a firm that has substantial power in the market from intriguing benefit of that market power for the purpose of ruining it one of its competitors, preventing other firms from entering the market, and deterring firms from taking part in the competition conduct in the market. On the other hand , Canada’s competition policy seeks to promote a competitive process where the policy plays crucial roles in coming up with a market framework that is able to allow formation of new markets. For example, electronic market places (Western Australia. 1996. Pg 23). The policy should also promote efficiency on the operations of these new markets by making sure that the competition act, all related legislation, and conformity approaches remains relevant and effective. Analysis 2: In most cases parts of the Competition Act seeks to make sure that small business receives enough protection from large suppliers as well as consumers through outlawing numerous forms of discrimination. In Canada, discrimination between customers for quality and quantity of goods is prohibited (Facey, 2000. Pg 17). The prohibition does not depend on indications that the discrimination act has any effect o anti-competitive actions. There is no defense that differences in price justification are influenced by any cost difference. On the other hand, discounts are allowed even if they are not cost justified. However, allowances on advertising or marketing on terms that are not proportional are prohibited without any considerations on anti competitive effects (Ross, 1997.pg 467-93.). All these prohibitions that were enacted raised big concerns that large buyers were in a position of extracting unduly large discounts from suppliers. Therefore, the purpose was to protect small enterprises from chain stores. There has been some efforts from Bureau on risk limits in a way that the rules can be used to prevent competition unnecessarily (Rowley, 1999.pg , 89.). These efforts have not beard fruits because small businesses have a strong believe on offering some protection. In Australia the trade practices act, which is under the completion policy, has provisions, which deals with unfair trading. The competitive policy in the country has put recognition to these requirements as mutually reinforcing. They enhance Australians welfare through competition promotion and fair-trading (Doern, 1996.pg pp. 68-101,). The provisions contain some prohibitions, which includes conducts that are inconsiderable in businesses transactions, prohibits enterprises from contravening an applicable industry code of conduct, and finally, prohibitions against businesses from taking part in misleading or deceptive conduct. All these protective measures are aimed at ensuring that there is a fair trade where unfair competition among enterprise in the two countries is eliminated (Australia, 1999.pg 98). ­ Analysis 3: There are laws enforced by the Bureau in Canada against marketing practices that harm consumers. In this case, the bureau is not a general consumer protection agency, therefore the Provincial governments plays a major role in the protection of consumers over unfair business practices, as well as contract terms, warranty, sale circumstances,, and business licensing. Under the competition act, there are prohibitions against misleading advertisements and making sales that are above the advertised prices (Gorecki, 1984. Pg, 102). General impressions are thoroughly assessed in order to determine whether the representation is misleading or not. The penalties imposed on reckless or knowing parody were also increased to beef up consumer protection practices. Therefore, to make sure that consumers are well protected there is a Joint Canada-US Task Force on Deceptive Marketing Practices. This task force was established under an agreement between the national governments, as well as a joint venture with the police department to make sure that the legal consumer interest protections in the market are strong. In Australia there were some weaknesses identified in the in the consumer protection framework. Some of the weakness fell under regulatory difficulty complexity, jurisdictions that are costly, consumer outcomes that are perverse, and lack of responsiveness to policy emerging needs. The new consumer protection policy frame work comprises of national consumer laws relevant to provisions in the trade practice act (Jeffrey Brown (1997.pg 495-534. ). The implementation of these new consumer protection laws will be undertaken in a scheme of State and Territory legislation that adopts the requirements of the Trade Practices Act. Unfair consumer contracts and consumer products safety will be addressed and highly monitored. The above three analysis can further be explained through theories like classical perspective and new classical synthesis. The classical perspective theory on competitions states that business practices can be irrational restraint when it comes to individual liberty especially on trade people to undertake their livelihood. For example, monopolists keep the market under stocked by failing to supply the effectual demand and sell their products above the natural price. Such actions clearly show the need for consumer protection under the competition law. On the other hand, the new classical synthesis theory holds that manufactures and suppliers of goods and services in competitive free markets maximize social welfare. In this case, new firms can enter the markets and compete with the existing firms. Therefore, to have a competitive free market that delivers productive and dynamic efficiency protection against unfair competition is important. From the above analysis, it is clear that the most effective competition policy is the one in Australia. The points are clear from the three analysis that the government in Australia has managed to come up with new consumer protection and unfair trading laws (Richardson, 1997. Pg 109). All these are aimed at ensuring that there is a fair competition in the markets and goods and services are offered are of the required quality. Recommendations: The two governments are trying to addresses competition as well as development through the competition policy. As a result, they have shown major steps on the evolutionary journey in this process. Therefore, the society in the two countries is determined in taking the steps addressed in the analysis with an aim of transforming their economies. The competition law / policy should not present any problems to those who have a strong believe on the competitive business environment that encourages efficiency and serves the public good. Therefore, these two countries should try to inspire all stakeholders to be involved, and define the public interest, which will make sure that the economy becomes more competitive resulting into an economic development. Conclusion: This paper has compared the competition policy between Canada and Australia on a number of distinct areas. The analysis made above has addressed areas on unfair protection, consumer protection and all the areas that are prohibited under the competition law in the two countries. It is clear that competition laws have been in application in the two countries for a very long time. The competition policy / law are similar in one way or the other, however, each country has come up with amendments to the act with an aim of making sure that consumers and small business survives in the markets. Reference List Anderson, R, 1998. “Competition Policy and Regulatory Reform in Canada, 1986–1997”, Review of Industrial Organisation,. vol. 13, ed. New York: s.n. Australia. (1999). Impact of competition policy reforms on rural and regional Australia: supplement to Inquiry Report: modeling the regional impacts of national competition policy reforms. Canberra, Commonwealth of Australia. Australia. (1998). Impact of competition policy reforms on rural and regional Australia: issues paper. [Melbourne], Productivity Commission. Chandler, H. a. R. J., 2000. “Beyond Merriment and Diversion: The Treatment of Conspiracies under Canada’s Competition Act”, Roundtable on Competition Act Amendments, May 25, 2000. Toronto: s.n. Doern, G. B., 1996. “Canadian Competition Policy Institutions and Decision Processes”, Comparative Competition Policy: National Institutions in a Global Market. Oxford: ,G. Bruce Doern & Stephen Wilks,eds.,. Edwards, C. D. (1976). Studies of foreign competition policy and practice. Ottawa, Department of Consumer, and Corporate Affairs. Facey, B, 2000. “An Efficiency Defense that Maximizes Welfare:. The Canadian Competition Tribunal Gets it Right,, Volume Vol. 15:1,, pp. p. 70, Fall. . Gorecki, P. &. W. T. S., 1984. The Objectives of Canadian Competition Policy, 1888-1983.OECD (2000), Economic Survey. Canada, Paris.: s.n. Ross, S. F., 1997. “Antitrust Lessons from ‘The True North Strong and Free’”,. Antitrust Law Journal, Volume Vol. 65:2,, pp. pp. 467-93.. Rowley, J. W. &. M. O., 1999. “The Canadian Antitrust Regime”, Global CompetitionReview: The Antitrust Review of the Americas 2000. London: s.n. Graham, E. M., & Richardson, J. D. (1997). Global competition policy. Washington, DC, Institute for International Economics. Norman, G., Thisse, J. F., & Phlips, L. (2000). Market structure and competition policy game theoretic approaches. Oxford, UK, Cambridge University Press. Khemani, R. S., & Stanbury, W. T. (1991). Canadian competition law and policy at the centenary. Halifax, N.S., Institute for Research on Public Policy. Western Australia. (1996). Competition policy: consideration of the implementation of a national competition policy. Perth, W.A., Legislative Assembly. Read More