CCI AND TARAI:Are They Successful in Promoting Competition?

CCI AND TARAI:Are They Successful in Promoting Competition?

Deepansh Verma

Introduction

The relationship between the three economic entities has always been a widely studied subject matter in the field of economics, however before understanding the underlying relationship, it is first essential to grasp the meaning of the concepts first. Firstly, consumers, or final consumers, generally refer to, the people who actually consume the product, or in essence, purchase without any intention of reselling it or using it for manufacturing. There exists no person in an economy who is not a consumer, after all, it is impossible to survive without consuming, which is why, it is just as Smith says, "consumption is the sole end and purpose of all production" and that "the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer”. Out of everything else, consumer interest is arguably the most important object of protection, since consumer interest is everyone’s interest, and that is where government intervention comes in. Government intervention refers to government actions to influence the way financial markets or industries operate. Government intervention exists primarily to protect the consumers from being exploited by unfair market practices, and legally safeguards their interests. It should be noted though, that government intervention also serves to protect producer, distributor, and other economic parties’ interest, however this paper shall only take government intervention with regards to consumer’s interests into its purview.

This is where monopoly ties in and although it has been defined above, I would like to present a definition of my own, in my opinion, a monopoly in essence is the power vested in a seller, which allows it to exploit the consumers, now, whether the seller chooses to exploit them or not is a different matter. It is an amalgamation of several factors such as dominant market share, unique product, barriers to entry, which even individually give a seller a heavily favourable position in the market, together form what is called a monopoly. Generally, though, sellers holding the positions of monopolists, tend to shove aside consumer interests for something much more lucrative, profit. Just as consumers are motivated to get the best for the cheapest, as unscrupulous as it makes them seem, sellers would almost always want to sell their product for the maximum possible price, irrespective of whether it would be in the consumer’s interests or not. Government intervention exists in many forms to prevent the monopolists from taking advantage of consumers who have no other sellers to look to and are desperate for the product, such as in the form of price ceilings, prevention and regulation of mergers and competition laws, the latter of which is discussed below.