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The industry and the efficiency of the economy. State regulation of industry structures

One of the main conditions for the effective functioning of the national economy is the balance of its sectoral structure and the presence of a competitive environment. Therefore, the sectoral policy of the state should be aimed at the development of these factors.

The objectives of the state industry policy include three main concepts of the state’s influence on the activities of the company:

1) Promoting economic efficiency. It is assumed that the achievement of economic efficiency of a company is possible in the presence of competition, as a result of which an efficient distribution of resources is achieved. Competition is a means of creating an environment that helps reduce costs, create new products, new firms, new activities, new methods of production and implementation, technological progress and innovation.

2) Optimization of the behavior of economic agents. Creating a competitive environment is a process that allows firms to optimize their behavior on their own. Since markets are constantly evolving, sectoral policies should create conditions conducive to competition (freedom of exit and entry, incentives for innovation, support for a certain degree of competition between firms).

3) Promoting the better functioning of society as a whole. Sectoral policy of the state reflects public interests:

- protection of national industry,

- assistance to firms and industries in difficult situations,

- development of regions,

- employment protection,

- stimulation of leading companies,

- protection against foreign capital,

- development of small and medium-sized businesses,

- consumer rights Protection,

- establishing rules of fair competition,

An important direction of state regulation of the development of industries is antitrust policy, the purpose of which is:

• ensuring the efficiency of production and distribution of resources in the economy;

• Prevention or elimination of undesirable market structures and undesirable behavior of economic agents - that is, situations that are considered to violate public welfare;

• assistance to some groups of economic agents at the expense of others (for example, assistance to small firms in their competition with large, regardless of their effectiveness, or to firms in some industries compared to others).

Different countries give different meanings to goals in their antitrust laws, which reflects one or another country’s preferences in stimulating competition. Yet most countries stand on

position obstructing certain activities of firms that are considered illegal.

According to the traditional antitrust policy, the following actions are attributed to the behavior of firms that are considered illegal:

1) fixing sales prices, secret and explicit, so that the prices set by the company fall out of the sphere of market influence;

2) purchase restrictions: the prohibition of customers to buy any product at another place, from another seller, at a different price or in a different volume than established by the seller;

3) sales restrictions: prohibition of suppliers to sell goods to another customer, in another place, at a different price or in a different volume than is provided for by the contract with the buyer company;

4) related sales: the sale of one product to a customer, provided that he buys any other (agreed upon in advance in the contract) product of this company;

5) unfair advertising: the emphasis in advertising messages on such product qualities that the product actually does not have, or emphasizing the shortcomings of the goods of a competing company, which in fact may not exist;

6) unfair labeling of goods: registration of the appearance of the goods in a way that does not meet its purpose, or an indication of its internal characteristics that are not inherent in the product;

7) vertical or horizontal restrictions on competition: pressure on suppliers (consumers) of products or on other firms producing this product in order to strengthen the firm's own influence in the market by forcing partners to impose their own rules of conduct.

In practice, the implementation of antitrust policy encounters certain difficulties, among which are the following:

1) Lack of an unambiguous interpretation of the consequences of the behavior of the company.
For example, a merger of two firms can lead, on the one hand, to an increase in the sale prices of a product (a negative consequence of an imperfect market structure), and on the other hand, a similar interaction between the two firms can result in the introduction of a new product or in improving the quality of an old product (a positive consequence of a monopoly ) That is, when conducting an antitrust policy, a balance should be made of the consequences of both negative and positive.

2) Uncertainty of the subject of damage from an imperfect market structure, since it is often not obvious which market agent is the infringed party. The fragmentation of the end customers leads to the fact that violations of the company's good faith behavior in the market are not always recorded and become the subject of state regulation.
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