1. Competition Policy and Consumer Protection
Dr. Patrick Krauskopf Swiss Competition Commission (COMCO)
National Training Workshop on Competition Policy and Law organised by CUTS International & Coordinated by CUTS Institute for Regulation and Competition (CIRC), Botswana, 25 – 27 July, 2007

2. What is competition?
BMW
Fiat
Costumer

3. The importance of competition in an economy
Competition allows a suitable assignment of resources and a better distribution of income

4. Competition promotes innovation and productivity (1)
In a competitive market, the firms must seek to fulfill the requirements of their clients and to offer them:
better prices
better quality
new and improved products and services
better services before and after sales
Otherwise, they will probably lose their market shares

5. Competition promotes innovation and productivity (2)
Competition leads to:
A better assignment of the resources
More innovation and technical development
More consumers satisfied

6. Competition promotes innovation and productivity (3)
Competition is in the interest of the consumers
For firms competition means lot of stress and plenty of risks to loose money. Therefore firms try to restraint competition
How can this be done?

7. Cartels or mergers influence (1)
Cartels or mergers influence the degree of competition/ can lead to dominant firms
Firms on the market: 2 situations
Cartel or merger
Degree of competition I + II -

8. Cartels or mergers influence (2)
Firms can they form cartels or merge as long as they do not restraint competition too much / do not become too dominant
In single cases it is very difficult to decide whether a cartel or merger restraints competition too much / whether a cartel or merger leads to too dominant firms

9. Cartels or mergers influence (3)
Producers
Dealers
Consumers

10. The monopoly and monopoly conducts
Mesures against the benefit of consumers
Economic welfare is reduced as well as the market and the investment
The costs are raised and the competitiveness is reduced
The price is raised
The production and the commerce are restricted
More incentives to get extraordinary income
Monopoly

11. Ideal market structure: no firm is dominant
Producers
Dealers
Consumers

12. Typical market structure on many markets: today
Producers
Dealers
Consumers

13. Importance of competition policy
Allows market access and eliminates distortions
Reduces the cost of supplies or capital goods
Allows the access of financial resources
Reduces the uncertainty of investment

14. Application of competition law (1)
Promotes a better use of productive resources to generate a variety of goods and services with better prices and availability
Prevents excessive market concentrations and creates opportunities for small enterprises
Prevents and eliminates monopolistic practices

15. Application of competition law (2)
Strengthens industry and internal markets
Promotes growth of innovative and efficient enterprises, with better potential and endurance to adverse changes, which allows them to improve and compete in national and international markets.

16. The three pillars of competition law
What can today competition law do?
Cartels – horizontal or
vertical ones
Mergers
Abusive use of market
dominance
Control and eventually forbid cartels (Art. 81 EC, Art. 5 KG)
Control and eventually forbid mergers (Art. 2 Merger Reg, Art. 9 and 10 KG)
Control and eventually forbid abuse use of market dominance (Art. 82 EC, Art. 7 KG)

17. Thank you For further information, please do not hesitate to contact:
Mr. Patrick Krauskopf:
Ms.Katrin Emmenegger: