Competition Law and Consumer Protection : Conflict and Complementarity

The protection of consumer welfare or broadly speaking protection of the interests of consumers is a central aspect of all modern competition laws as well as a direct aim of consumer protection laws. Competition law and consumer protection policies are complementary and mutually reinforcing. Competition in the market increases efficiencies and encourages innovation. Competition also creates incentives for product differentiation and improves the quality of goods and services provided. In that sense, competition enhances consumer welfare by providing consumers with a wider choice at competitive prices. Consumer protection strengthens competition in the markets. Consumers make informed decisions in their preference for goods and services in respective markets when they are well informed. However, despite being complementary in many ways, competition and consumer protection laws cover different issues and employ different methods to achieve their goals. Whilst consumer protection rules are built upon the premise that consumers are the weaker party to transactions and should be directly protected for this reason in their dealings with traders through certain consumer rights, competition law only indirectly protects the consumers’ economic well-being by ensuring that the markets are subject to effective competition.This necessitates the coordination between the two laws is to maximize the synergies and minimize the tensions. So that, consumer policy tools while seeking approaches that effectively protect consumers should not unduly or unnecessarily restrict competition, and competition policy should be brought to bear to ensure that, subject to appropriate consumer protection safeguards being in place, competition should be allowed to work where it can, including by the elimination of any unjustified restriction on entry and on competitive conduct