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Why Safaricom is being accused of abuse of dominance

UREPORT

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.

Why Safaricom is being accused of abuse of dominance

By moses kamau | 6 years ago

Why Safaricom is being accused of abuse of dominance

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.

moses kamau | 6 years ago

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