Regulation
- Regulation involves rules administered by a government agency or another body.
- These rules are designed to influence barriers to entry and exit, prices charged, product standards and how the product is sold.
- These regulations, especially in the case where they’re administered by the government, are backed up by law
- They are designed to correct market failure from the abuse of market failure, imperfect information, under-consumption of merit goods, and other causes.
- For Cinema:
- The British board of film classification is seeking to overcome information failure by classifying movies with age ratings (18, 15, PG, U, etc.)
- In the past, however, it used to censor films, treating the censored parts as demerit goods.
- For TV Broadcasting:
- Ofcom furthers the interests of consumers by promoting competition and protecting them from harmful or offensive material (demerit goods)
- For Tourism:
- The trade organisation ABTA (Association of British Travel Agents) aims to maximise the consumer’s satisfaction by issuing a range of guidelines covering advertising and the sale of services
- If a firm doesn’t adhere to these guidelines, then they can be fined or expelled from ABTA
- A consumer can therefore be confident in a firm that is a member of ABTA
- For spectator sports:
- UK athletics oversees drugs-testing of athletes, to ensure fair competition, and implementing the rules of the sport
- Cricked is governed by The England and Wales Cricket Board (ECB), which is responsible for the direction of cricket in the country
- The FA is responsible for upholding and administering the rules of football, and has the power to change the rules.
- Some sports are governed by international bodies, such as FIFA being responsible for the organisation of international football tournaments
- The Royal and Ancient Gold Club of Saint Andrews is also tasked with developing and promoting the game of golf to other nations
- The Office of Fair Trading, which has a jurisdiction over the leisure industry, enforces consumer protection and competition law, and seeks to maximise competition
- If the OFT is concerned by any behaviour, or anti-competitive practise, it can ask the competition commission to carry out an investigation, which could result in large fines.