Enforcing the Competition Law in Namibia A Toolkit - cuts ccier

its competitors’ profit: Ford cannot and does not ignore Honda when makingdecisions regarding automobile production. Oligopolistic markets, thus, canbe said as being characterised by inter-relationship between marketparticipants. A firm must consider rival firms’ behaviours to determine itsown best policy. The Banking sector in Namibia provides an example of anoligopolistic market.Monopoly: This is a market structure characterised by a single firm selling aproduct for which there are no close substitutes or substantial barriers to entry. 24In this case the monopolist can maximise its profit by charging the highestprice the market will bear. The telecommunication sector of Namibia beforethe liberalisation of the sector was a perfect example of monopoly.3.4 Competition Law & PolicyCompetition has increasinglybeen recognised as thecornerstone of thrivingeconomies throughout theworld. 25 It is essential for theefficient allocation ofresources, helps to promoteinnovation, increases factorproductivity, creates moreemployment and income earningopportunities, enables SMEs to participate in themarket. It is thus a useful tool for growth and poverty reduction. 26www.wecomply.comMARKET AND COMPETITIONCompetitive forces work best in the presence of markets that are free fromdistortions. However, as mentioned before, perfect competition rarely existsin real life, so the full benefits of competition do not often materialise. 27 Thecompetitive process is more than often discouraged and is not fair for reasonsof special interests, big government, and citizens’ weak economicunderstanding. When markets are not competitive, whether due to policyinduceddistortions, technological characteristics, or anticompetitive behaviourby market participants, an economy may miss many potential benefits for itscitizens. Furthermore, government deregulation efforts that are intended tobenefit consumers might even have counter-effects.Consequently, in addition to disciplines to eliminate non-competitivebehaviours by market participants, other measures are needed to enforcepolicies that encourage firms to compete (or discourage or prevent firms fromresisting rivalry), in order to improve the efficient allocation of resources.Thus, the benefits from competition are not only limited to keeping prices atmarginal cost for the benefit of consumers, as in static efficiency, but alsocreate a conducive environment for new businesses to enter and grow whileat the same time compel existing firms to continuously improve and performbetter.Enforcing the Competition Law in Namibia: A Toolkit 15