Consumer protection is the cornerstone of competition law and policy. The benefits of a strong competition policy for consumers are manifold such as better choice and lower prices.
As a matter of fact, an ineffective competition policy creates monopolies, restrictive trade practices and market access barriers, which directly or indirectly deprive consumers of choice and raise prices.
Needless to say, the consumer of 21st century can no longer be left ill-informed, dormant and voiceless. A consumer wouldn't like to be cheated, over charged, deceived or ignored.
It is the competition law which is meant to be performing its consumer protection function efficiently. Without well-informed consumers, who are able to make informed-choices and could switch away from the established suppliers, a workable competition policy cannot be materialized.
Obviously, consumer wants among other things good quality of service at lowest possible price, with full information regarding the service, so that he/she could compare and contrast between different service providers to make an informed choice.
In addition, in the event of failure of the provision of quality service, the consumer should be able to make his/her voice heard. This can only be made possible if competition laws of the state seek to 'protect the interests of consumers, not by protecting the competitive process itself, but by taking direct action against offending undertakings.'
The 'market failure' occurs as a consequence of dilution of competition in the market. The undertakings would get into restrictive trade practices, which fall into two categories: 'horizontal restraints' and 'vertical restraints'. These restraints would restrict new market entrants and consequently there would be a free-ride for the dominant market player to abuse its dominant position.
When a country has upgraded competition laws along with efficient machinery to tackle with the contemporary issues of the competition regime, it is primarily the consumer who is the recipient of benefits.
Perfect competition reduces prices, provides consumer with a great deal of choice supplemented with reliable information. On top of this, there is innovation, competitive business atmosphere and reward for the most efficient market player.
The question however strikes in one's mind that how can Pakistan reap the enormous benefits of competition? The answer can be traced basically to increasing the level of awareness amongst consumers regarding existing competition laws and secondly, its proper enforcement through the competition authority.
It is the Monopoly Control Authority (MCA), which was separated from Corporate Law Authority in 1994 and is mandated by the Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance 1970 (MRTPO) to regulate competition.
Unfortunately, MCA lacks the capacity and resources to carry out its functions efficiently and the existing competition laws need an overhaul. However, the pivotal role of the governments cannot be discarded in the proper functioning of the competition authority.
It is primarily the governments who are responsible for the enactment of competition legislation and empowering the competent authority to enforce competition laws.
Likewise, in Pakistan there is none other than the government, which is responsible for promoting competition friendly policies and generating funds for a vibrant competition advocacy.
Competition authorities of many developing countries share similar kind of barriers regarding the implementation of competition law. Our country is no different in this respect.
These barriers include the 'influence of vested interests (including those supporting state monopolies), poorly drafted legislation, lacking coherence and difficult to enforce; under-resourced enforcement agencies and lack of political priority or will.
Empirical evidence in the developed countries suggests that transparency in the affairs of competition policy is a must for its success. It's because the end-users of competition policy must be aware of what the rules are and feel that they have a stake in their formulation and implementation.
In addition, consumer culture is of paramount importance in developing competition. Consumer activism needs to be there, which can give the competition authorities, both market information and evidence of the particular interests of consumers that should be protected.
Consumer organizations have a crucial role to play in the competition advocacy. Primarily, it is the consumer organizations who provide information and advice to consumers.
They are stakeholders in the design and implementation of competition law and policy. They can also act as monitors of market problems and initiators of action.
