Competition law/Antitrust/Antimonopoly laws in Nepal
A business risks breaching competition law when it engages in exclusive dealing by restricting how its customers or suppliers do business. While exclusive dealing is common in legitimate business arrangements, it is illegal when it substantially lessens competition. Competition laws. Also known as “antitrust” or “antimonopoly” laws. Antitrust refers to a field of economic policy and laws dealing with monopoly and monopolistic practices. A business risks breaching competition law when it engages in exclusive dealing by restricting how its customers or suppliers do business. While exclusive dealing is common in legitimate business arrangements, it is illegal when it substantially lessens competition. Competition law (known as antitrust law in the U.S.) seeks to maintain the integrity of the marketplace by prohibiting anti-competitive practices and by subjecting corporate mergers and acquisitions to regulatory review if they have the potential to significantly reduce competition
Examples of behaviour that could amount to an abuse by a business of its dominant position include: imposing unfair trading terms, such as exclusivity; excessive, predatory or discriminatory pricing; refusal to supply or provide access to essential facilities; and
Some famous examples of direct competitors include Apple versus Android, Pepsi versus Coca-Cola, and Netflix versus Hulu. But direct competition isn't exclusive to well-known national or international brands. Two shoe stores in a rural town are direct competitors.
3 Types of Competitors in Business
1. Direct competitors.
A direct competitor probably comes to mind when you think of your competition. These are businesses offering similar (or identical) products or services in the same market. They also vye for the same customer base.
Some famous examples of direct competitors include Apple versus Android, Pepsi versus Coca-Cola, and Netflix versus Hulu. But direct competition isn't exclusive to well-known national or international brands. Two shoe stores in a rural town are direct competitors. So are a handful of realtors servicing one area.
Digital companies also see direct competition. For example, after the success of Twitter’s Periscope app, Facebook pivoted its focus to live video to keep up.
Since direct competitors sell similar products in a similar manner, this type of competition is often a zero-sum game — meaning, a customer that buys a competitor's product won't buy yours. For example, if you buy a hamburger at McDonald's, it's not likely you'll swing by Burger King to buy another one.
2. Indirect competitors.
Indirect competitors are businesses in the same category that sell different products or services to solve the same problem.
For example, Taco Bell and Subway fall under the same category — fast-food — but they offer entirely different menu options. While they both seek to solve the same problem (feed hungry people), they provide different products to solve it.
Here's another example — residential painters experience indirect competition with home improvement chains like Home Depot or Lowes. Again, the category is the same but the product offerings differ.
Indirect competition isn't necessarily a zero-sum game. Consider someone buying supplies from Lowe's to re-paint their home —only to do a sloppy job. They may call a local painter to fix the mistakes.
3. Replacement competitors.
A replacement competitor offers an alternative to the product or service that you offer. You both seek to solve the same pain points, but the means are different.
For example, a restaurant and coffee shop in the same neighborhood could be replacement competitors. Walking down the street, some customers may choose to grab a to-go lunch from the coffee shop, while others prefer the restaurant.
The idea here is that customers are using the same resources to purchase the replacement that they could've used to buy your offerings.
These competitors are potentially dangerous if there's more than one way to solve the same problem you seek to resolve. Additionally, these are the most challenging competitors to identify. After all, we can't read people's minds and understand all the choices that led them to us.
But we can find other ways to uncover this information — such as requesting feedback from customers or keeping an eye on their social media mentions. With this insight, you can better understand your audience and identify your replacement competitors.
As you work to identify your competitors, you may discover more than you anticipated. Don't get overwhelmed. Remember that not all competitors are built the same — some are less of a threat than others.
Now let's discuss ways to identify the players above, below, and next to you.
5 Ways to Identify the Competition
1. Check the first page of Google.
An easy starting point is doing a quick Google search. Think of a few keywords someone might search to find you, such as [service or product] + [location]. For example, general contractor Sacramento.
Then, note the top companies on the first page of your search results. You may notice your keywords return thousands of results, but you shouldn't stress. The most relevant section is the first page and the competition directly above and below you on it. Those tend to be your direct competitors.
2. Research targeted keywords.
Check the keywords you are currently targeting to identify other businesses targeting the same ones.
This is a solid strategy for finding your indirect competition since they likely target the same keywords. For example, the keyword "fast-food" may reveal Subway and Taco Bell — both indirect competitors —as the top two results.
3. Monitor social media conversations.
Opinions are aplenty on social media — so it's relatively easy to find what your customers are saying. To find relevant conversations, enter your businesses' name in the search bar and check the results.
For instance, someone may post a question to Twitter asking what hair salon they should visit in your city. A follower may respond with the name of your business, along with a handful of others.
You can expand your search beyond social media to include community forums, such as Reddit or Quora — along with review sites like Yelp. Both of these resources can reveal helpful insight into your customers and why they chose your business over the competition.
4. Perform market research.
Check the market for your product or service and note any companies with a competing offer. Market research can be done a number of ways — whether that be with a Google search, by browsing through trade journals, or by talking with your sales team to see what other companies are commonly brought up by customers (to name a few).
5. Ask your customers.
Customers are crucial to identifying your competition — after all, they likely sifted through most of them before landing on you. There are many ways to solicit feedback from customers — both online and in-person. That could mean striking up conversations while cashing them out or sending an email survey after each sale. One way or another, try to find the best approach and regularly check the feedback for any trends.
Every business has competition, and it pays to know the top players. But remember, as your business grows and evolves, so too will the competition. A direct competitor may go out of business, or an indirect competitor may become a direct one. All this to say, make a habit of routinely checking those above, below, and next to you.
Competition Promotion and Market Protection Act, 2063 (2007)
An Act Made to Provide for Promotion of Competition and Protection of Market Preamble: Whereas, it is expedient to make legal provisions in order to further make national economy more open, liberal, market-oriented and competitive by maintaining fair competition between or among the persons or enterprises producing or distributing goods or services, to enhance national productivity by developing the business capacity of producers or distributors by way of competition, to protect markets against undesirable interference, to encourage to make the produced goods and services available to the consumers at a competitive price by enhancing the quality of goods or services by way of controlling monopoly and restrictive trade practices, and to maintain the economic interests and decency of the general public by doing away with possible unfair competition in trade practices; Now, therefore, be it enacted by the House of Representatives in the First Year of the issuance of the Proclamation of the House of Representatives, 2063(2006).
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