Consumers

1
Consumers

• Aims to afford some parity of power to consumers.
• KEY LEGISLATION
• Sale of Goods Act
• Trade Descriptions Act
• Fair Trading Act
• Consumer Credit Act
• Unfair Contract Terms Act
• Consumer Protection Act
• Students need to appreciate the key
  responsibilities outlined in these Acts and how
  any dispute would be resolved.

2
Competition Policy
Aims to prevent unfair competition and to
encourage fair play in the market place. Powerful
firms may try to improve their position via entry
barriers / restrictive practices / collusion or
even price agreements. Competition policy aims to
prevent this abuse of size /or power. It aims to
protect the public interest and encourage
productive efficiency. In the future, European
competition policy will dictate what is
acceptable.

• KEY LEGISLATION
• Monopolies Restrictive practices act (1948)-
  This established the MMC. To investigate
  monopolies (firms with a market share of gt25 or
  have assets gt70m). Nowadays the parameters are
  that a firm is investigated if it is though to be
  against public interest.
• Fair Trading act (1973)- Set up OFT which, headed
  by the DGFT refers cases to the MMC. Usually the
  threat is enough to prevent mergers.
• Restrictive practices act (1976)- Requires firms
  to register agreements, which may restrict
  competition. The restrictive practice court
  provides a judgement.
• Resale price act (1976)- Prevents suppliers and
  retailers enforcing a minimum price, BUT
  recommending a resale price is illegal.
• Competition policy (1980)- Anti competitive
  practices made subject to investigation and
  ultimate prohibition.

3
The Impact of Competition Policy
Competition policy is always controversial some
see it as an intervention, restricting market
forces, while others see it as the only way of
ensuring that competition occurs. Public
interest is very hard to define (a stakeholder
question). Are all monopolies bad? What about the
benefits gained from RD, EofC, etc. It really is
a question of Intervention vs. Laissez-faire.

• General points
• Firms try to avoid increases in legislation via
  self-regulation. For this to work they must be
  abreast or ahead of public expectations in order
  to make laws unnecessary.
• High profile firms are least likely to ignore
  legal requirements (reputations take years to
  acquire and minutes to lose).
• A firms culture is important. In the long term,
  legislation can affect culture, but in the short
  term culture is often more powerful than law in
  determining behaviour.
• Large firms often have ethical codes, which
  ensure compliance with the law is a bare minimum.
  Smaller firms depend more on attitudes of their
  owners.