Preparing for competition in a network utility - final assignment Essay

Preparing for competition in a network utility - final assignment - Essay useFor assessing this abuse, the relevant market place needs to be defined. In this essay, the ladder to define relevant market called SSNIP test is discussed with reference to two closed cases under OFT. This essay is organized as follows. Second section discusses the economical theory behind competition, section 3 discusses the Competition Act 1998, Section 4 discusses the cases ,section 5 discusses the digest and findings and section 6 concludes the essay.According to economic theory, competition and antitrust law are supposed to increase allocative, productive and dynamic efficiency (Economides, 2004).However, in the case of network industries, due to their special features, economic ordination is established as an alternative to competition and antitrust law in many of these industries(Economides, 2004). The complimentarity of network industries to each(prenominal) other and the increasing returns t o scale in consumption effects of these industries called network effects are allure distinguishing features of network industries. Due to the network effects of these industries, contrary to the law of demand for traditional industries, the willingness to pay for remainder unit will be higher here(Economides,1996 Brenan,2000).The following are the main special features of the network industries that place upright due to the network effects. The first is the possibility of making money from both sides of a network. Second is the cosmos of externalities in the market which means incomplete internalization of benefits by the market. Third is the high speed market penetration in network industries compared to the other industries. Fourth is the very high market share and gain ground inequality for markets with strong network effects. Fifth is the possibility of maximisation of social surplus by monopoly. one-sixth is that it is not necessary for the existence of anti competitive a cts to create