Anti-competitive behaviour Definition
Anti-competitive practices are business practices that prevent and/or reduce competition in a market.
Anti-competitive practices include:
- dumping, where products are sold into a market at a low price which renders competition impossible, in order to wipe out competitors
- barriers to entry (to an industry) designed to avoid the competition that new entrants would bring
- price fixing, where companies collude to set prices, effectively dismantling the free market
- tying, where different products are linked together to prevent consumer choice
- resale price maintenance, where resellers are not allowed to set prices independently
- absorption of a competitor or competing technology, where the powerful firm effectively co-opts or swallows its competitor rather than see it either compete directly or be absorbed by another firm
It is usually difficult to practice anti-competitive practices unless the parties involved have significant market power.