Topic / economics

Competition Policy

Market power, barriers to entry and policies intended to protect competitive outcomes.

Core exam brief

Know the idea before you use the evidence.

Definition

Competition policy seeks to limit harmful market power and promote competitive markets, entry and consumer welfare.

Chain of analysis

Lower barriers to entry can increase contestability, pressure firms to cut costs and prices, and strengthen incentives to innovate.

Evaluation trigger

Market concentration does not always imply weak competition; consider economies of scale, dynamic efficiency, innovation and the threat of entry.

Analysis and example bank

7 August 2026 · United Kingdom

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CMA proposes Aldi and Lidl face supermarket land-agreement rules

On 7 August 2026 the Competition and Markets Authority provisionally decided that Aldi, Lidl GB and Lidl NI should be covered by supermarket land-agreement rules designed to stop large grocery retailers making it harder for rivals to open nearby. The case turns an abstract idea — barriers to entry — into a concrete competition-policy example.

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A shopper placing fresh produce into a supermarket trolley