External Regulation of Business

Question 1

What powers does the Competitions and Market Authority (CMA) have

Answer 1

Enter premises and demand documents
Impose fines
Disqualify directors

Question 2

What are the two chapters of the Competition Act (1998)

Answer 2

(i) Anti-competitive agreements

(ii) Abuse of a dominant market position

Question 3

What are the characteristics of a business that is likely to be dominating the market

Answer 3

High market share
Few competitors
Little potential for new competitors

Question 4

What are the typical abuses of a business dominating a market

Answer 4

Unfair selling prices
Restricting production
Applying different trading conditions
Attaching unrelated supplementary conditions

Question 5

What are the conditions in which cartels form

Answer 5

Few competitors
Little product differentiation
Established communication
Recession

Question 6

What are some examples of illegal practices that individual persons within a business can carry out

Answer 6

Insider trading
Market abuse
Fraudulent trading
Wrongful trading
Money laundering

Question 7

What are some advantages of international free trade

Answer 7

Specialisation
Transfer raw materials
Increased competition
Larger markets
Trading links