The act of competing is the means promulgated by supporters of a free market economy of how to achieve a more efficient allocation of resources. Competition is beneficial to consumer well-being, as it drives individual freedom and the well-being economy. Competition laws aim to regulate abuses, fostering economic growth and development. Too many restrictions and regulations for market entry are considered unhealthy; hence the laws help to maintain the balance between freedoms and restrictions.
National legislators transform competition policy considerations into domestic law by means of law. Competition laws drive free market behavior and maintain competitive pressures among producers for efficient resource allocation. For example, many industries or companies compete in world markets. But when companies do engage in business outside their homeland, they often form strategic alliances to form new foreign partnerships. This leads to a greater degree of international economic interdependence and openness to international production and cross-border trade. Due to this increased competition from abroad, the opportunities for domestic competitors to enter the market also increase considerably.
Undoubtedly, competition from abroad has given rise to extraterritoriality. The extraterritorial application of national laws has helped to overcome considerable risks to individual competition engaged in broader commercial activities. These laws have helped to reduce serious deficiencies related to both the efficiency and the legitimacy of the application of domestic law abroad. Over the years, enforcement efforts and laws have expanded in prominence.
To be sure, countries’ policies very often conflict with each other, giving rise to practical problems and even diplomatic conflicts. However, the extraterritorial application of laws has come to the rescue of several nations. In addition, the vigorous enforcement of laws and policies against horizontal mergers, collusive behavior, and strategic alliances has helped to maintain the rate of improvement of an economy. However, internationally, legal policies are still not very effective in meeting the rapidly changing demands of technology and globalization.
For free trade, freedom of choice and access to continuous markets, an effective competition policy is necessary. Such a policy can create conditions for growth, development and employment opportunities. Therefore, controlling competition at the national level through effective laws and policies becomes more decisive. In the future, broader anti-competitive practices are likely to pose complex challenges. Considering the changing circumstances, laws and policies need to be updated to meet future challenges. In this sense, international cooperation and/or international coordination can help to achieve positive results.
