Which statement about competition policy is NOT true?

Which statement about competition policy is NOT true?

• A. Aims to promote competition for the benefit of consumers
• B. Prevents organisations from participating in cartels
• C. Can block mergers from occurring if it is likely to lead to the lessening of competition
• D. Encourages price fixing and collusion

Answer: (D)

Competition policy is all about keeping markets competitive to benefit consumers. It targets anti-competitive behavior and part of that is preventing arrangements that push prices up or limit choices. The idea is to stop cartels and other collusive practices, and it can also block mergers if they would lessen competition. So the statement that it encourages price fixing and collusion is not true—it runs directly against the purpose of competition policy, which is to deter such conduct and protect consumer welfare.

Competition policy is all about keeping markets competitive to benefit consumers. It targets anti-competitive behavior and part of that is preventing arrangements that push prices up or limit choices. The idea is to stop cartels and other collusive practices, and it can also block mergers if they would lessen competition. So the statement that it encourages price fixing and collusion is not true—it runs directly against the purpose of competition policy, which is to deter such conduct and protect consumer welfare.