Why Safaricom is being accused of abuse of dominance
A firm’s ability to raise its prices is usually constrained by competitors and the possibility that its customers can switch to alternative sources of supply. When these constraints are weak, a firm is said to have market power and if the market power is great enough, to be in a position of dominance or monopoly Competition laws typically contain provisions prohibiting abuse of market power by dominant firms or attempts of not yet dominant firms to monopolise markets. A proper understanding of when a firm’s actions could be considered abusive is important for competition authorities because consumers’and the economy would be harmed by an incorrect intervention. A firm with a large market share, which might be considered dominant, also needs to understand the law and economics in this area, which is not always easy.
By moses kamau
8 years ago