Posted by Social Science Research Network
Competition and Entry: Do Entrants Deserve Special Protection in India and Other Emerging Economies?
By D. Daniel Sokol (University of Florida) & Jan Peter van der Veer (RBB Economics)
Abstract: We discuss the question whether competition policy should provide entrants with special protection in the Indian competition law context. Under an effects based approach, competition enforcement should to protect consumers rather than the interests of individual competitors. Entrants deserve special protection only in recently liberalized markets characterized by the presence of a former state monopoly or a current SOE that display specific characteristics such as natural monopoly. Barring such highly specific circumstances, promoting competitors over consumers hurts consumer welfare and innovation. India’s Competition Act is an essential tool for policymakers to promote a transition to greater country competitiveness, innovation, and economic prosperity for India. To achieve these objectives, CCI must implement the Competition Act in a manner that promotes consumers over competitors, and minimizes the distortions of industrial policies instead of amplifying them.