Benefits of CPL for Business and the Economy

Fair competition is a key element of a functioning market economy. It provides impulses to innovation and promotes an optimal allocation of resources. By setting limits to market power, competition policy ensures the fair participation of companies and safeguards the interests of consumers. The increased competitiveness of economies, resulting from a competitive economic framework, is a crucial prerequisite for growth.

Competition policy creates a level playing field for business.

Without clear rules on competition, companies can concentrate their power, engage in price-fixing or use other means to restrict market access for their competitors. A sound competition policy allows for companies to enter markets when they see opportunities, and to leave when they are no longer able to operate effectively. In doing so, it is an important instrument to monitor business practices.

Competition drives innovation.

It forces companies to lower their costs and provide better products and services than their competitors. In order to stay in their respective markets, companies continuously need to enhance their operations and productivity. This provides incentives for technology transfer and investments in innovation.

Competition fosters economic growth in the long run.

In a competitive setting, markets work better as resources are efficiently allocated and utilized. Distortions resulting from anti-competitive practices are prevented. A highly competitive private sector contributes to a country’s overall competitiveness as domestic companies are better suited to compete in export markets, or against imports in their home markets. An effective competition regime indicates a conducive business environment, both to domestic and foreign investors.