OPINION

Protecting free competition

The high cost of living has long been a pet subject for the media and the professed enemy of all governments. Consumers, the first victims of soaring prices, are hardly convinced by pundits arguing that the law of supply and demand automatically punishes profiteering and reduces prices. Day-to-day experience demonstrates that the market alone is no guarantee of protection against the profiteering of large and medium-sized companies. True, consumer awareness in Greece remains very low. The country still lacks a consumer movement strong enough to intervene and punish profiteers. Even if such an organization existed, it’s highly unlikely that it would be able to deal with the problem of unacceptably high prices by itself. Nor can consumers, jaded by daily stress and work, always be on the lookout for better prices. In any case, the causes of the problem are deeply rooted. Price fixing, also known as cartel formation, is a common practice among companies in a specific sector. As long as the state tolerates such oligopolistic practices, it encourages other companies to follow suit in order to avoid finding themselves caught in a disadvantageous position. Consumers and the economy in general suffer the consequences of such state tolerance. Undermining free competition is an offense. But it’s not one that is always easy to prove. At this level, only an effective state-controlled monitoring body can trace wrongdoing and impose hefty fines on perpetrators. Strict penalties will discourage other companies from committing a similar offense. Greece’s Competition Commission has for many years been rather powerless, failing to carry out its basic tasks. Its existence has been mainly a formality. Upgrading it into an independent body is a decisive step in the right direction, but it will have to be followed through if it is to yield fruit. The organization needs more staff and needs to be equipped with the right weapons to serve its purpose. Attempts by the Development Ministry to reach a settlement with the big companies in the different sectors in a bid to keep the lid on prices are welcome. However, government calls would be more effective if offenders were punished with hefty fines. That is, if the Competition Commission met the necessary requirements for bringing its mission to an end.