Monopolistic Competition and Consumer Dilemmas

This assignment requires students to conduct research on monopolistic competition and its implications for consumers. Students must analyze market structures, product differentiation strategies employed by firms, and the resulting impact on consumer choices and welfare. The research should also consider ethical dimensions related to consumer protection and potentially misleading or aggressive commercial practices.

CAN UK GOVERNMENT EFFECTIVELY
PREVENT FORMULATION OF
MONOPLOIES AND CURB UNFAIR
PRACTICES OF LARGE CORPORATION: A
CASE STUDY OF TFL

EXECUTIVE SUMMARY
Firms exercising monopoly in the market enjoy a significant portion of market share, and
in pursuance to the same determine all the forces and trends prevailing within the industry.
Generally the focus of such entities is not on improving the quality of products, rather they
concentrate on increasing the market share to increase the profits. The consumers are forced to
purchase these products for non-availability of alternatives and moreover, pay an extra price. In
pursuance to the same the companies are required to promote and advertise their product,
incurring significant expenses. Transport for London (TfL) is operating to manage the transport
system of Greater London. It is a local government entity which is responsible for all the primary
road routes, rail networks, trams, buses and all other related services. It is interesting to note that
the body occupies a monopolistic position in the market and has been operating to govern all the
rail and road networks. The monopolistic position of TfL is supported by the government and no
specific measures are been undertaken to prevent the same. However, there are certain measures
which purport to regulate the operations of the entity.
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TABLE OF CONTENTS
CHAPTER 1. INTRODUCTION....................................................................................................4
1.1 Background............................................................................................................................4
1.2 Aims and Objectives..............................................................................................................5
1.3 Research Questions................................................................................................................5
1.3 Significance of research.........................................................................................................6
1.4 Structure of Dissertation........................................................................................................6
CHAPTER 2: LITERATURE REVIEW.........................................................................................8
2.1 Introduction............................................................................................................................8
2.2 Concept of monopoly and unfair trade practices in market...................................................8
2.3 Merits and demerits of monopoly..........................................................................................9
2.4 Role played by government in preventing monopolistic behavior in UK market...............10
2.5 Role played by government in preventing unfair trade practices in UK market.................11
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................11
3.1 Introduction..........................................................................................................................11
3.2 Research Approach..............................................................................................................12
3.3 Research Philosophy............................................................................................................12
3.4 Research design...................................................................................................................13
3.5 Research Type......................................................................................................................13
3.6 Data Collection....................................................................................................................14
3.7 Sampling..............................................................................................................................14
3.8 Data Analysis.......................................................................................................................15
3.9 Reliability and Validity........................................................................................................15
3.10 Ethical Consideration.........................................................................................................15
3.11 Limitation of Study............................................................................................................16
CHAPTER 4: DATA ANALYSIS................................................................................................16
4.1 Questionnaire.......................................................................................................................16
4.2 Research Findings................................................................................................................18
CHAPTER 5: CONCLUSION AND RECOMMENDATION.....................................................27
5.1 Conclusion...........................................................................................................................27
5.2 Recommendations................................................................................................................27
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REFERENCES..............................................................................................................................29
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CHAPTER 1. INTRODUCTION
1.1 Background
Transport for London (TfL) is operating to manage the transport system of Greater
London. It is a local government entity which is responsible for all the primary road routes, rail
networks, trams, buses and all other related services (Transport for London, 2017). In the year
2015-16 the entity was allotted a budget of 11.5 billion, which is constituted from all the fares
(40%), government funds (23%) and miscellaneous sources (37%). TfL is the only government
body which is operating in the region for providing transportation services. Though the body has
collaborated with other private and public entities for different ventures, it still remains the only
body primarily existing in the industry. It is interesting to note that the body occupies a
monopolistic position in the market and has been operating to govern all the rail and road
networks. Monopolistic behavior of business organizations can be characterized as unfair trade
practice which sought to have detrimental effects on the market and economy of the respective
company. Firms exercising monopoly in the market enjoy a significant portion of market share,
and in pursuance to the same determine all the forces and trends prevailing within the industry.
The operations of such entities are of such a nature that the firm in itself constitutes to be the
entire industry. They have the power to determine the prices. Moreover, the entire output of the
concerned industry is constituted from the output of such companies and hence any change in
their output has a direct effect on the market price. Attainment of monopoly is an entire process
which can be achieved by different companies through varied ways. An entity could have
developed strategies for driving out the other firms from market and specifically catering to the
needs of customers. Another way through which this status can be achieved is that of mergers
and acquisitions, which may reduce all the components into one. Apart from these major ways
there is also a possibility that the company may have started with a niche product and patented
its production. Hence, these are some of the ways through which occurrence of monopolies is
made possible in the market.
The primary demerits of monopoly are that such companies are empowered to exercise
their discretion in ascertainment of the market prices. In addition, they also have the capacity to
make changes in the product and make alterations by adding certain irrelevant features.
Generally the focus of such entities is not on improving the quality of products, rather they
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concentrate on increasing the market share to increase the profits. The consumers are forced to
purchase these products for non-availability of alternatives and moreover, pay an extra price. In
pursuance to the same the companies are required to promote and advertise their product,
incurring significant expenses. These expenses are eventually borne by the consumers through
additional pricing. In spite of being attached with varied disadvantages, such behavior still exists
in various industries. It is interesting to note that market possessing this element has strict
barriers both for entry and exit. This implies it is not easy for any entity to enter into the market
and break the monopoly. Scale of production may pose as one of the barriers for entry of a new
firm. A monopolistic firm shall be producing or operating on a large scale to cater to the needs of
the entire market, and hence the overall cost of production is very low. However, it shall be
impossible for any new firm to operate at such a lower price. Hence, the present research shall
focus on the role of government in prevention of monopolistic behavior and other related trade
practices.
1.2 Aims and Objectives
Topic: “Can UK Governments effectively prevent the formulation of monopolies and curb
unfair practices of large corporation: A case study of TFL”
The present research aims “To ascertain if the UK Government can effectively prevent
formulation of monopolies and curb unfair practices of large corporation, specifically in the case
of Transport for London”. In order to accomplish this aim, the objectives of present research
shall be as mentioned herein:
 To understand the concept of monopoly and other unfair practices in market
 To determine the merits and demerits of monopolistic behavior
 To determine the role played by government in prevention of occurrence of monopolistic
behaviour
 To determine the role played by government in prevention of occurrence of unfair trade
practices
 To recommend measures for government to prevent unfair trade practices in market.
1.3 Research Questions
The research sought to respond to the following specific questions for attainment of aims
and objectives:
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 What is the meaning of monopolistic behavior and unfair practices in market?
 What are the merits and demerits of monopolistic behavior?
 What role is played by government in preventing monopolistic behavior from the end of
large corporations ?
 What role is played by government in prevention of occurrence of unfair trade practices?
 What are the measures which government can undertake to prevent unfair trade practices
in market?
1.3 Significance of research
The present research shall determine the manner in which large corporations of UK are
exercising dominance in the market by occupying a monopolistic position. The specific focus of
this research shall be on Transport for London (TfL) which is the only government body which is
operating in the region for providing transportation services. Though the body has collaborated
with other private and public entities for different ventures, it still remains the only body
primarily existing in the industry. Through this research the investigator sought to determine the
role played by government in preventing such monopolies and other related trade practices in the
market. Lastly, it shall provide as an authentic source of information for the UK government in
respect to various measures which can be undertaken for prevention of such occurrence of any
such practices.
1.4 Structure of Dissertation
To undertake an effective and efficient research it is necessary for the researcher to
follow a structured format. This shall further enable the researcher to effectively achieve the
aims and objectives of the present research, and moreover realize accurate results. In pursuance
to the same the following structure shall be followed:
Chapter 1 Introduction: This section introduces the research topic and the significance of the
same for the government in relation to prevention of unfair trade practices.
Chapter 2 Literature review: In this chapter all the research questions are answered on the basis
of studies already undertaken by various authors and scholars.
Chapter 3 Research methodologies: This chapter shall illustrate all the tools and techniques
which have been used in undertaking the research in an effective manner.
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Chapter 4 Data analysis: It is the fourth chapter which shall contain an analysis of all the data
which has been gathered by application of varied research tools and techniques.
Chapter 5 Conclusion and recommendations: This section shall provide the findings derived
after analysis of all the data. Moreover, it shall also state certain recommendations which the
government can adopt for prevention of unfair trade practices.
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CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
Literature review provides base to the entire research which the researcher sought to
undertake. This section enables them to critically analyze all the related concepts and
information and gain a better understanding of the subject from the view point of different
authors. Furthermore, the process of research is enhanced to produce more accurate and precise
outcomes.
2.2 Concept of monopoly and unfair trade practices in market
Monopolistic trade practices followed by certain corporations is not considered favorable
for the market. Zhelobodko and et. al. (2012) has defined the term monopolize as a process in
pursuance to which an entity is enabled to raise the prices or restrict the competitors to survive in
the market. Hence, such an enterprise can be said to be exercising monopoly if its exists as the
single supplier in a particular industry and there does not exist economic competition. It has
been generally noted that monopolistic position is generally occupied by big companies existing
in the market. However, Feenstra (2010) is of the opinion that size cannot be made as one of the
characteristics of monopoly. It is significant to note that only those entities which have the ability
to exercise significant market power to charge prices higher than normal. Therefore, some of the
specific characteristics which determine the presence of monopoly are price discrimination, high
barriers for entry and exit, economies of scale, lack of substitutes, deteriorating the quality of
product, adopting deceptive practices and so on.
Further it has been observed by Nikaido (2015) that unfair trade practices prevailing in
the market ought to have a detrimental effect on the manner it is functioning. Some of the
specific activities or operations which can be characterized as unfair in nature are misleading
advertisements, misrepresentation of quality of products or services, abuse of dominant position
and so on. It can be stated that all these activities are undertaken with the purpose to maximize
profits and obstruct the capital flow into the line of production. On the other hand, Zhelobodko,
Kokovin and Thisse (2010) has opined that traders pursue these activities with the intention to
manipulate prices or conditions prevailing in the market or to hamper the flow of supplies in
order to impose costs which are unjustified in nature. Thus, these practices are undertaken by the
traders to influence the purchasing decision of the customers in such a manner, that they
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otherwise would not have undertaken. These activities are misleading, lack due diligence and are
aggressive enough to impact the attitude of an average costumer.
2.3 Merits and demerits of monopoly
Monopolies have the potential to generate net benefits for the market in presence of
certain circumstance, against its reputation of being an evil practice. However, it is necessary
that the specific circumstances are present to produce favourable impacts on conditions of
market. It has been noted by Bertoletti and Etro (2016) that natural monopolies can be
considered beneficial, as they are able to operate at lower cost of production. This cost has the
potential to be much lower than those which could have been achieved with competition existing
in the market. Furthermore, it is also necessary that such markets are regulated by government
which is un-corrupted and enables these entities to generate benefits for the society. Moreover, it
has also been recognized that there are certain monopolies which are government granted and
primarily operate to bring benefits to the society. Some of the specific examples are patents,
copyrights, franchises and so on. An example of monopoly existing in the UK market is
Transport for London, which is a government body and existing to provide effective
transportation to the city of London. This has produced enormous benefits in the form of
consistent revenue and has been dedicated to development of new as well as innovate ways for
extracting maximum out of its assets.
On the other hand, it has been observed by Di Comite, Thisse and Vandenbussche (2011)
that monopolies have a considerable amount of potential to hamper the economies and
democratic governments. It has been seen that companies practicing monopolistic behaviour tend
to adopt extreme measures to disguise the consumers, for persuading them to buy a particular
product. Moreover, they also succeed in these tactics as the market is devoid of potential
substitutes to the same. Apart from these other harmful effects of monopoly are charging higher
prices for lower quality products. Furthermore, it has also been observed that the advancement of
technology for production of these goods or services is also very slow. The Research and
Development department is often dedicated to suppressing the competition, rather than
introducing new and innovative products. Moreover, it has also been observed that monopoly
renders a dominant position in the market, which is often abused by the respective companies to
only produce harmful or detrimental effect, whether intentionally or unintentionally. On the
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contrary, it has been observed by Ottaviano and Thisse (2011) that monopolies have the potential
to produce negative effects even if the concerned enterprises do not indulge in unfair trade
practices.
2.4 Role played by government in preventing monopolistic behavior in UK market
As established in the above section monopoly has the potential to impact the market in
both beneficial and harmful manner. In pursuance to same, the UK government has undertaken
various measures to restrict formation of monopoly in cases where there exists a potential to
cause harmful effects to the market or society. Parenti, Ushchev and Thisse (2017) has discussed
the enactment of competition law, in pursuance to which the Competition and Market Authority
(CMA) has been formulated to regulate the competition existing in the market and enforce the
concerned law in an effective manner. The primary objective of these laws is to prohibit
arrangements which have the potential to prevent or distort competition in the market and
hamper the manner in which trade practices are being carried out. Some of the specific
prohibitions which were enumerated under Competition Act 1998 are formation of cartels, abuse
of dominance, collusion of firms and so on. Hence, in accordance to these laws the enterprises
were required to act in a particular manner which ensures maintenance of healthy competition in
the market. In addition, it has also been opined by Heyne, Boettke and Prychitko (2010) that
price fixing by a group of companies or fixing the level of output among the group is strictly
prohibited. Another legislation which has been enacted in the nation is that of Enterprise Act
2002, which has installed and enhanced the power of regulators of market. These regulators have
been empowered as well as obligated to detect the cases which are against the competition
policies and punish them in accordance to law (Misleading And Aggressive Commercial
Practices – New Private Rights For Consumers, 2014). The specific provisions of this act
requires the regulators to assess the validity and impact of mergers which is being undertaken
between companies. Over and above the powers conferred under Competition Act, 1998 this
statute also empowered the regulators to investigate the market in an effective and implement
covert surveillance. In furtherance to the same it has been opined by the Hawley (2015) that
formation of cartels is a criminal activity under the relevant laws, and moreover, the regulators of
UK have adopted a strict approach towards the same. It has also been observed that the
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regulators of UK have adopted a even more strict approach then the regulators of EU and makes
the directors liable to be disqualified for breach of any of the provision of these laws.
2.5 Role played by government in preventing unfair trade practices in UK market
It has been determined by Dabbah (2010) that UK consumers spend more than £1,160
billion every year on purchase of goods and services. It has been further stated by him that a
highly active and instrumental role is played by consumers in determining the level of
competition among the enterprises. However, it is also vital that the decisions of these consumers
is influenced by factors which are truthful and bonafide in nature. This infers that it shall be
assured that the representations being made by the companies in the market to persuade
consumers to purchase their products shall not be false and untrue in any manner. The
government has enacted Consumer protection from Unfair Trading Regulations 2008 in order to
assure prevalence of fair trade practices in the market and restrict aggressive commercial
activities. In accordance to these regulations the government requires a commercial practice to be
undertaken under good faith by maintaining a standard of skill and care (Protecting consumers
from scams, unfair trading and unsafe goods 2016). The application of this care and skill shall be
judged on the basis of reason ability which shall expected by any prudent person in the same
circumstances. On the other hand, it has been stated by Elhauge and Geradin (2011) that an
activity shall be considered as unfair in the event it restricts any of the persons to make an
informed decision in respect to purchase of specific product. The mentioned regulations strictly
consider these activities as an offense if undertake in breach of these provisions. Thus, the UK
government has enacted varied laws for assuring non-adherence of activities which are distorting
in nature. The contract laws, common law rulings, unfair contract terms act and the Business
Protection from Misleading Marketing Regulations, 2008 are the statutes which have been
placed in order to regulate the activities of different components of market and prohibit unfair
trade practices.
On the basis of the all the literature which has been critically reviewed in the present
section it can be stated that though TfL has not been undertaking advantage of its dominant
position, there are still areas which remains unexplained in respect to the operations of TfL. It
has been understood through the existing literature the body has collaborated with other private
and public entities for different ventures, it still remains the only body primarily existing in the
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industry. Therefore, through conducting the primary research the researcher intends to
understand the implications of monopolistic position of TfLin the industry. In addition, it also
intends to ascertain the role played by government in rendering the present position.
CHAPTER 3: RESEARCH METHODOLOGY
3.1 Introduction
This section of research methodology purports to cover all the significant techniques and
tools which have been applied to undertake the entire research process in an effective manner to
accomplish the ascertained aims and objectives. Some of the specific areas which shall be
covered in the present study are the research approach, type, philosophy, data collection and
analysis, ethical considerations and so on (Widdowson, 2011). It is important to state that the
tools and techniques so mentioned in this section occupies an integral position in the process of
research and thus, requires the researcher to make all the ascertainment at the preliminary stage
of research process. This shall reflect the level of reliability of all the data which has been
collected and assist the readers in determining the various methods which have been deployed.
3.2 Research Approach
Research approach determines the path which the researcher shall follow in the entire
process of studying the relevant data. Once this approach is ascertained, the researcher is enabled
to make decisions in respect to the other tools and techniques which shall be preferred for
effectively attaining the aims and objectives. Moreover, this also enables the researcher to ensure
that no omissions were made during the entire process of research. Primarily it is undertaken
either with inductive approach or deductive approach (O'Leary, 2013). The former is a study
which is based on premises which are known to the researcher and generates conclusion which
have not been tested. However, the latter is a study on the basis of true and established premises
and moves from general to specific, unlike the inductive approach.
The researcher in the present study has adopted inductive approach, as the collected data
was used to explore different phenomenon and further, identify themes as well as patterns in
order to develop a conceptual framework. The process of research was initiated with stating the
research aims and objectives, which was consistently pursued throughout the study. Furthermore,
in order to gather relevant information a structured questionnaire was prepared in order to
ascertain the role of TfL in London. The primary rationale behind not selecting the other
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approach for the present study is that the researcher intended to produced results which are
generalized in nature and not specific. Therefore, the researcher collected specific data from
various sources and has analyzed them to deduce to a generalized conclusion.
3.3 Research Philosophy
It illustrates the belief with which the entire process of gathering, analyzing and utility is
undertaken by the researcher. It can also be termed as evolution of logical reasoning which
incorporates the contemporary thoughts and ideas to research in relation to a particular topic. It
can be in the form of Positivism or Interpretivism (Knobe and Nichols, 2013). The form
philosophy is of the belief that the reality is stable and shall be viewed and illustrated from an
objective perception. Thus, it operates to reveal the truth in relation to the manner a fact exists
and is often quantitative in nature. Whereas the latter is of the view that subjective interpretation
can only assist the researcher to understand the reality in its fullest forms (Mkansi and
Acheampong, 2012). The key to research of this philosophy is interpreting the phenomenon and
can take the form of a tedious task.
In the present study the researcher has chosen interpretivism as the basis of their
philosophy, in order to efficaciously attain the aims and objectives the conducting the research.
With the assistance of this philosophy the researcher shall also be able to understand the role
played by UK government in regulating the forces of market and ascertaining the measures taken
specifically in accordance to TfL.
3.4 Research design
At the preliminary stage of the process of research, it is essential to develop a systematic
plan, in accordance to which the entire process of study shall be ascertained. This shall further
enable them to identify specific issues which may arise during the course of research and
develop solution in respect to each one of them. It is also described as the means to arrange the
conditions or collection to produce the findings in an effective manner (Baskerville and Wood-
Harper, 2016). Thus, it represents the overall strategy which may be adopted to integrate various
constituents in a coherent manner and address the research problem effectively. Research design
can be in various forms such as descriptive, casual, exploratory, experimental and so on.
The present study has been undertaken on the basis of descriptive style of research design
as the study has been undertaken to depict the manner in which the participants operates. The
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primary three ways to collect accurate data in respect to research design are observational,
method of viewing and record of the participants. Hence, the researcher has observed the
measures undertaken by government in respect to the operations of Tfl and in accordance to the
same have made observations.
3.5 Research Type
Research type represents the nature of research which has been undertaken by the
researcher with the use of different techniques and tools. In order to ascertain other types of
research methods it is essential to ascertain the research type so as to accurately ascertain the
manner in which different methods can be determined. Quantitative and Qualitative techniques
constitute to be the two types of research type. The former involves numerical data and requires
application of different statistical tools for analyzing the entire data (Broad, 2014). Where as the
latter involves theoretical data or opinions collected with the held of different sources, which are
analyzed through formation of themes.
The present research process is initiated through collection of data with assistance of a
questionnaire. Hence, qualitative type of technique has been applied for collecting the
information and analyzing the entire data. With the assistance of this technique the researcher
has gathered primary information through questionnaires and assessed the data on basis of
thematic analysis.
3.6 Data Collection
A highly crucial role is played by this research methodology as it guides the researcher in
respect to collection of data so as to attain the objective of researcher. Data can be collected
either through primary source or secondary source (Orlikowski, 2010). The former sources are
constituted by questionnaires, interviews, surveys and so on, whereas the latter is collection of
relevant information through books, journals, articles, opinion of scholars and so on. Thus, it
basically is gaining knowledge through existing theories and literature on the subject.
In pursuance to the same, all the data and information for carrying out the present
research has been sources through both primary and secondary techniques. This has enabled the
researcher to gain a holistic and diversified knowledge in respect to the subject matter. It is
important to consider the fact that information collected through secondary sources has assisted
the researcher to understand the basic aspects, and on the basis of the same the primary data has
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been analyzed to produce to desired outcomes. Moreover, the researcher has taken assistance of
desk-based approach for undertaking the secondary research and pursued various journals and
articles relying on the same.
3.7 Sampling
This is another critical factor which plays an instrumental role in ascertaining the
accuracy of the outcomes, as it requires the researcher to select an appropriate population for
collection of data and gather opinion of specific people from the entire population, which shall in
turn reflect the opinion of the entire population (Verschuren, Doorewaard and Mellion, 2010).
The two techniques of sampling which are available to the researcher in general are probabilistic
and non-probabilistic.
The present study has chosen its samples through application of random sampling and
has ascertained the population as relevant government officials. A sample size of 10 has been
determined to collected data and information in relation to role of government in regulating the
operations of TfL
3.8 Data Analysis
Once the primary data is collected, there arises the need to produce an effective and
accurate outcome from the same by conducting an analysis. The application of analysis
technique is dependent on the nature of data so collected. Thus, in the case of numeric data the
analysis shall be undertaken through application of quantitative techniques, which can be in the
form of SPSS or such other statistical tools (Borzacchiello and Craglia, 2012). However, in the
event the nature of data is theoretical, then qualitative techniques shall be applied.
The analysis of the entire data in the present case has been undertaken through thematic
analysis as the data so gathered is qualitative in nature. Thus, in pursuance to the same the all the
information so collected through questionnaires is deduced in the form of themes, which in turn
is analyzed by the researcher in an effective manner.
3.9 Reliability and Validity
All the processes and methods applied to conduct the present research have been
undertaken to eliminate all forms of consistency and enable the produce outcomes which are
completely reliable and accurate in nature. Special efforts have been made to assure
standardization of all the elements involved in the study and produce findings which can be
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relied upon (Ritchie and et. al., 2013). In addition, it has also been ensured that the research has
been conducted to apply appropriate technique and effectively address all the research questions
in a holistic manner. Moreover, the sources of data which have been chosen for gathering the
data and other information can also be characterized as highly authentic and trusted in nature. In
respect to the secondary sources it has been assured that no redundant or old sources have been
perused and therefore, all of them are dated post 2010. Hence, it can be stated that all the data
and findings of the research is completely reliable and valid in context to the subject matter.
3.10 Ethical Consideration
The entire process of research and the present study has been undertaken with a special
focus upon the ethical aspects. It has been assured that no confidential data about TfL or the
government has been revealed through the present study. In addition, special attention has bee
laid on the privacy of all the respondents who have assisted the researcher in gathering relevant
and authentic information (Miller and et. al., 2012.). It can also be stated that no process has been
undertaken to even remotely compromise on the interest of other entities or individuals. Lastly,
the analysis of data is completely free of biasness and has been undertaken by the researcher in
good faith.
3.11 Limitation of Study
Though the researcher has undertaken various measures to assure smoothness of the
entire process, there were many challenges which were faced. It can be stated not all the
respondents were willing to respond to the questions or respond in an unbiased manner. In
addition, time and cost acted as the major constraints for the entire team of researcher. The
resources available on the subject matter and the chosen Case study were limited to understand
everything in an appropriate manner.
CHAPTER 4: DATA ANALYSIS
4.1 Questionnaire
Name:
Age:
Gender:
Position:
1. Considering the case of TFL, what are the criterion which can be considered to characterize
behavior of the entity as monopolistic in nature?
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 Existence of single player in market
 Strict entry and exist barriers
 Uniqueness of product or services
 All of the above.
2. What are the criterion which are considered to characterize the behavior of an entity as unfair
in nature?
 Misrepresentation
 Deceptive
 Unethical
 All the above
3. Do you believe abuse of dominant position is an unfair trade practice?
 Yes
 No
4. In you opinion is TfL abusing its dominant position in the market?
 Yes
 No
5. Do you believe exercising monopoly in market in an unfair trade practice?
 Yes
 No
6. In your opinion can the trade practices of TfL be characterized as unfair in nature?
 Yes
 No
7. Do you believe compromising on the quality of products or services is an unfair trade
practice?
 Yes
 No
8. 'Monopolistic Behavior has the potential to produce positive outcomes for the market'. Do
you agree with the statement in reference to the case of TfL?
 Strongly Agree
 Agree
 Neutral
 Disagree
9. Which of the following are the demerits of monopolistic behavior?
 Abuse of dominance
 Low quality
 High Pricing
 None
8. Do you believe UK government is empowered to prevent monopolistic behavior in market?
 Yes
 No
9. Kindly specify the measures, if any, that have been taken by the UK government.
_________________________________________________________________________
10. Do you believe government is successful in preventing unfair trade practices in market?
 Yes
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 No
11. Kindly specify the measures, if any, that have been taken by the UK government.
________________________________________________________________________
12. What is the best measure which the government can adopt to curb unfair trade practices
from market?
 Levying specific duties
 Standardization of quality
 Imposing penalties
 Price Fixation
13. What is the best measure which the government can adopt to regulate the prevalence of
monopoly in market?
 Keep a check on mergers and acquisitions
 Criminalize formation of cartels
 Price Fixation
 All the above
4.2 Research Findings
Theme 1: TfL can be characterized as exercising monopoly on the basis of being the single
player in the market.
Considering the case of TfL, what are the criterion which can be considered to
characterize behavior of the entity as monopolistic in nature?
Existence of single player in market 4
Strict entry and exit barriers 3
Uniqueness of product or services 1
All of the above 2
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4
3
1
2
Existence of single player in
market
Strict entry and exit barriers
Uniqueness of product or
services
All of the above
Interpretation: Majority of the respondents have opined that TfL can be characterized as a
monopoly on basis of the fact that it the only supplier in the public transportation services in
London. This opinion was reflected through the responses of 4 out of 10 respondents. However,
some of the others were of the view that this conclusion can be made on basis of the fact that
there exists strict entry as well as exit barriers in the industry, in addition to the uniqueness of
product or service being by TfL. On the basis of these determinations it can be stated that the
government officials are assertive of the view that TfL occupies the position of monopoly or near
monopoly in the market of London. Moreover, the present strategy in relation to the management
of the body is to operate in this position and provide the best services to the public of London
Theme 2: Transport for London (TfL) is not abusing its dominant position in the market
In you opinion is TfL abusing its dominant position in the market?
Yes 7
No 3
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Yes No
0
1
2
3
4
5
6
7
8
7
3
Column B
Interpretation: The clear majority of respondents have opined that TfL is not abusing its
dominant position in the London market. 7 out of 10 officials have made this opinion and the rest
three have responded that the operations of TfL are abusing the dominant position occupied by
the entity. On the basis of this data it can be inferred that the government officials agree that the
company has a monopoly in the market and in pursuance to the same occupies a dominant
position in the market. However, this dominance is not being utilized for abusing others in
market. Moreover, it has also been deciphered that the body has collaborated with other private
and public entities for different ventures in order to assure provision of quality services to the
public. This has further established that TfL does not intend to abuse its position and thus, all its
strategies are in consonance to the same.
Theme 3: Trade practices of TfL cannot be characterized as unfair in nature.
In your opinion can the trade practices of TfL be characterized as unfair in
nature?
Yes 6
No 4
21

Yes No
0
1
2
3
4
5
6
6
4
Column B
Interpretation: 6 out of 10 government officials have opined that the trade practices of TfL are
not unfair in nature. It can be inferred from this data that though the company exercises
monopoly in the market of London, its trade practices are not unfair in nature. The rationale
behind the same could be the fact that TfL is a government body and operates to provide services
to the entire city of London. This can be characterized as the primary objective of the
organization. Apart from this earning profits and making money is not the aim of this
organization. Moreover, it is bound by the relevant laws and regulations to undertake fair
practices and charge fair prices from the citizens for its transportation services. It has been
ascertained that the body is under a transition process, in pursuance to which it has collaborated
with other private entities. This further establishes that every strategy being implemented is for
enhancement of the quality of services.
22

Theme 4: Monopolistic Behavior of TfL has potential to produce positive outcomes for the
market.
'Monopolistic Behavior has the potential to produce positive outcomes for the
market'. Do you agree with the statement in reference to the case of TfL?
Strongly Agree 2
Agree 6
Neutral 1
Disagree 1
2
6
1
1
Strongly Agree
Agree
Neutral
Disagree
Interpretation: A Majority of respondents are of the view that the monopolistic nature of TfL has
produced positive outcomes for the London market. This opinion was made by 6 out of 10
respondents, which clearly infers that the position of monopoly of TfL is not viewed by the
government as detrimental to the forces of market, and is rather considered beneficial in certain
aspects. In pursuance to the position the company has been able to provide services at lower
prices. Moreover, the services being provided are also effective and efficient in nature. On the
basis of these facts it can be concluded that restricting the entry of any other organization in the
field in a deliberate strategy of UK government so as to provide transportation at lower process
and make it affordable for all class of people.
23

Theme 5: UK government is empowered to prevent monopolistic behavior in market
Do you believe UK government is empowered to prevent monopolistic behavior
in market?
Yes 8
No 2
Yes
No
0 1 2 3 4 5 6 7 8
8
2
Column B
Interpretation: 8 out of 10 respondents have opined that thought the government is capable of
regulating the monopolistic behavior of entities in the market, it has not undertaken specific
measures to promote other players in the said industry. The legislation of UK has enacted various
competition and consumer protection laws to regulate the operations of organizations, in order to
assure regulating monopolistic behavior in market. Assessing the strategies of business entities to
merge or amalgamate with other entities is strictly scrutinized by the regulators. Moreover,
economic restrictions have been imposed on the operations of TfL to ensure there is no abuse of
dominant position. However, in the case of TfL, government has deliberately catered to the
position of monopoly so as to provide efficacious transportation services to London.
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Theme 6: Standardization of quality is one of the measures taken by UK government for
regulating monopolistic behavior in market.
Interpretation: After assessing the measures undertaken by UK government it has been
understood that all the organizations are required to be in compliance with standard of quality
ascertained for each of the products. Apart from the same, various strict laws and regulations
have been enacted which are being regulated and implemented by different regulatory bodies so
as to assure maintenance of healthy competition in market. Another measure which is followed
by the government is that all the mergers and acquisitions are strictly scrutinized so as to assure
no organization occupies a position, which enables them to occupy a dominant or monopolistic
position, and in turn gains the potential to cause harm to the market.
Theme 7: UK Government has prevented unfair trade practices in the market
Do you believe government is successful in preventing unfair trade practices in
market?
Yes 6
No 4
6
4
Yes
No
Interpretation: A 60% respondents have opined that the UK government has successfully
prevented occurrence of unfair trade practices in the domestic market, however the other 40%
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say that the government has not been successful in preventing these practices. It can be inferred
from these figures that the government has put into operation various measures for preventing
the unfair or restrictive practices in the market. In spite of these measures they have not been
able to curb these activities from the market, but have surely installed measures of prevention.
Thus, it can be concluded that UK government has undertaken steps for prevention of these
activities and have implemented them in a successful manner.
Theme 8: Measures taken by the UK government for preventing unfair trade practices.
Interpretation: In accordance to the responses of government officials it can be concluded that
the UK government has enacted stringent regulations and laws for governing the operations and
other activities in the market. Moreover, the powers of all regulatory bodies have been
strengthened so as to ensure strict regulation of operations of business enterprises, which in turn
also influences the forces of market. A specific mention of Competition Act and Consumers
Rights Act could be witnessed in the answers of the officials. Hence, it can be inferred that there
exists a strong legal framework for regulating the market, which has been strictly implemented
by the regulatory bodies.
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Theme 9: Imposing penalties is the best measure, government can adopt to curb unfair trade
practices from market
What is the best measure which the government can adopt to curb unfair trade
practices from market?
Levying specific duties 2
Standardization of quality 2
Imposing penalties 4
Price Fixation 2
Levying specific duties
Standardization of quality
Imposing penalties
Price Fixation
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
2
2
4
2
Column B
Interpretation: 4 out of 10 respondents believed that imposition of penalties for undertaking
unfair trade practices is one of the most suitable and best measure for preventing business
enterprises from indulging into unfair or restrictive practices. Hence, a majority of them held this
view, while others were of the view that fixing the price of products or services, compulsory
standardization of quality of products and levying specific duties in the form of anti dumping,
countervailing and so on shall act as an effective measure for preventing such activities.
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Theme 10: UK government can effectively regulate the monopolistic operations of business
enterprises.
What is the best measure which the government can adopt to regulate the
prevalence of monopoly in market?
Keep a check on mergers and acquisitions 2
Criminalize formation of cartels 1
Price Fixation 1
All the above 6
Keep a check on mergers and acquisitions
Price Fixation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2 1 1 6
Column B
Interpretation: A majority view of reflects that the government shall impose a combination of
different measures to effectively regulate such a behavior at the end of large corporate. It shall be
inclusive of continuous monitoring on the mergers and acquisitions which are taking place in the
market, the requirement of obtaining an approval from the corned authority which analyses from
the perspective of competition. In addition, formation of cartels shall be criminalized and the
same shall be implemented with full vigor. Lastly, price fixation is another measure which shall
ensure that monopolistic enterprises do not take advantage of their dominant position and charge
undue prices from the customers.
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CHAPTER 5: DISCUSSION AND RECOMMENDATION
5.1 DISCUSSION AND CONCLUSION
It has been understood that the management of TfL has undertaken various measures for
venturing into private companies and other public entities so as to enhance the quality of services
being provided to the public. Firstly, considering the position of TfL it can be stated that
operations of TfL can be characterized as monopolistic in nature and a similar view is reflected
in the responses of all the government official as well. The rationale behind this conclusion is
that the government body is the only supplier in the respective industry and no other entity is
allowed to operate within the same industry.
It is important to note that TfL is a government body and this position of exercising
monopoly is approved and provided by the government itself. Hence, this is a case where
monopoly is being promoted as it also has the potential to produce advantages for the market and
the consumers using the services. One of the major advantage which is being delivered by this
status of TfL is that in absence of any form of competition the prices remain stable and being a
government body it also assures that a reasonable price is charged. Moreover, the quality of
services is never compromised. This can be inferred from the fact that though the company
occupies a dominant position in the market in pursuance to the monopoly, but its operations have
never been in the direction of abusing this position. Moreover, the trade practices of TfL can in
no way be characterized as unfair or restrictive in nature. Hence, the monopolistic position of
TfL is supported by the government and no specific measures are been undertaken to prevent the
same. However, there are certain measures which purport to regulate the operations of the entity.
5.2 Recommendations
In accordance to the entire study and the conclusion so deduced at the end it can be stated
that government has not undertaken any specific measures for regulating the activities of TfL. It
is believed by the researcher that even if the monopolistic position of the entity is supported by
government, there arises a requirement to regulate the operations of the agency so as to ensure
that interest of public is not compromised in any form. It is important to state that the primary
objective of government behind providing this position is to make available transportation
services to the city of London at an affordable price and with standard quality. In order to ensure
the same the government shall:
29

 Develop policies for drafting the pricing strategy in such a manner which is affordable
by all class of citizens and at the same time is feasible for operations of TfL.
 Install a specific mechanism for continuously monitoring the operations of organization
and ensure compliance with quality standards.
 The core management team shall be comprised atleast of one person representing the
interest of government in consonance with those of people.
 Adopt a PPP model, wherein private companies collaborate with TfL for undertaking
specific functions so that services are developed and delivered after attaining expertise
in the concerned field.
30

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