Relation between competition law and consumer welfare-
Prior to getting into the consumer protection aspect of competition law, it is necessary to first grasp its essence and fundamental purpose.
The term “Competition” refers to a “battle or contention for superiority.” Thus, in a commercial environment, “competition refers to enterprises’ quest for dominance over other firms. Competition law guarantees that the market remains competitive ensuring that consumers have a diverse variety of options uninhibited by restrictive tactics such as collusive behavior, price-fixing agreements, and so on.
Thus, sustaining and supporting competition enables an economy’s effective allocation of resources, resulting in the finest possible quality choices, the lowest prices, and ample supply for clients. In other words, competition regulation is implemented to enhance market fairness, which benefits consumers.
Additionally, competition drives producers to deliver high-quality products at reduced prices, since if a buyer does not like one producer’s offering, he may switch to another. Due to the customer’s flexibility to shift spending, each vendor is required to exercise strict discipline in order to fulfill consumer preferences.
In a market, competition strengthens the “consumer’s right to choice, thereby increasing the consumer’s surplus.” The most disadvantaged elements of society are more prone to tumble into poverty traps as a consequence of price rises and other shocks induced by a lack of competition.
Additionally, “competition drives innovation, enhances static and dynamic efficiency” & productivity, resulting in price reductions while concurrently enhancing the quality of goods and services. Increased competitiveness boosts economic growth, hence generating job possibilities, which are critical for poverty alleviation