Edited by Michael A. Crew and David Parker
Chapter 10: Regulation and Consumer Representation
Michael Harker, Laurence Mathieu and Catherine Waddams Price Introduction A separate chapter on consumer representation might seem redundant in a handbook on regulation – surely consumer interest is precisely the purpose of regulation? We explore the specific roles of consumer organizations in a regulatory framework. Regulation itself is often characterized as protecting consumers by imposing ex ante constraints on firms’ actions. In contrast, competition policy ensures that markets are structured so that consumers can exercise their own power through informed choice, and threatens ex post punishment for firms who restrict such choice through exploitation of their market power. Consumer representative bodies play a part in both situations. In the United Kingdom there is an apparent irony that independent consumer bodies were established by the same legislation which enhanced the importance of consumer protection in the regulators’ duties. One reason may be that sources of consumer information become particularly important when competition is introduced into a previously monopolized market. A large range of organizations purport to represent consumers: some speak for consumer interests as a whole, while others focus on particular groups (low income, the elderly or other groups perceived as vulnerable); some are general and others focus on a particular sector (e.g. energy); some are statutory and others voluntary. In regulated sectors they may arise because, although the regulator’s duties include consumer protection, there are particular challenges in catering to consumers who of necessity share a regulated network and its characteristics, including reliability. Within regulated industries, consumer representation covers a number...
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