Evaluate the extent to which competition authorities in the UK and US should aim to reduce the market power of firms such as Ticketmaster or if they should allow the free market to operate with minimal intervention.

The Role of Competition Authorities in Reducing the Market Power of Firms: A Comparative Analysis of Ticketmaster in the UK and US

 

The extent of governments' intervention to regulate competition involves addressing market power of firms such as Ticketmaster. Unlike the free market, higher ticket prices in wider market implies monopoly power and inefficient resource allocation. High prices for essential commodities in a monopolized economy such as tickets for live entertainment dissuade users from utilizing the same. A price mechanism facilitates the adjustment of supply and demand of vivo entertained ticket prices to enhance overall resource allocation. Government intervention such as antitrust regulations is needed to reduce Ticketmaster’s market power and promote fairer competition, thus eliminating the deadweight loss that characterizes monopolies. Such efforts would keep price at equilibrium, hence higher quantity and lower prices than the monopolistic price (Armstrong & Sanchez, 2021).

Ticketmaster enjoys monopoly power in the music ticket market, and thus, government intervention to remove market power within the firm would have secular benefits. Compliant with an objective of improving market efficiency and ensuring sustainable consumer welfare, the government should do a regulated limit for ticket prices for live music events. Regulations would facilitate realistic pricing in Ticketmaster considering pricing threshold. It is increasingly necessary for a government to support transparency in service fees ticket pricing mechanism for objective transparency and enhance consumer trust. Nonetheless, government intervention should purpose to correct market failures instead of eliminating business. While Ticketmaster enjoys the benefits of economies of scale, different government intervention within the subject should appreciate cost-benefit assessment. It should consider impacts of litigation costs, divestitures, and compensation awards AEgotzko et al.’s, (2021) assertions support maintaining market structure for effective crime prevention as exempting monopolies from antitrust laws foster systematic crimes.

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References

AEgotzko, A., Glader, N., Jalkebro, E. L., & Nyström, K. (2021). Raising competition: An analysis of planned changes to the Swedish Antitrust legislation. Journal of Antitrust Enforcement, 9(1), 66-109. https://doi.org/10.1093/jaenfo/jnaa040

Armstrong, M., & Sanchez, A. (2021). Platforms. In  Handbook of e-Commerce, 187–219. Available at: https://hanabi-lib.ru/articles-txt2019/Band_%20Harrison_%20Journal_%20of_%20Economic_%20Perspectives-Vol.%2028_N_%204_Oct._2014_%20(1).pdf#page=299

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