Regulation instruments. When a market fails, in other words, when it moves away from a competitive market, companies with power over this market appear. They are generally capable of imposing a higher price than that would which apply in a competitive market. They take advantage of their dominance. In these cases, the purpose of market regulation is to provide remedies so that this market can be more competitive. More generally, economic agents can adopt anti-competitive practices to hinder competitors even in the absence of market failure. Regulatory instruments are adapted to the various contexts that characterize these anti-competitive practices or market failures. Anti-competitive practices. Some companies can bridle their competition either by becoming excessively large in a market, or by setting up agreements with certain competitors to obstruct others, or by monopolizing resources. These anti-competitive practices are generally addressed by competition authorities or anti-trust authorities, which are charged with detecting and describing such practices and then penalizing them. That's why they are called ex-post regulation authorities. Their instruments are limited to prohibiting sector concentrations in order to prevent excessive influence over a market and to penalizing elicit agreements with heavy fines. Faced with the difficulty of proving the existence of agreements, there are laws enabling one party to the agreement to denounce it in exchange for clemency. Because of this type of provision, there is a significant risk around agreements. Market failures are more structural causes of market dysfunction. A market analysis can detect them and thus serve to prevent their harmful effects through solutions imposed beforehand by regulatory authorities called ex-ante regulation authorities for this reason. Regulating essential facilities. A frequent case of dominant stems from one economic agent holding a facility considered to be essential which means that access to this facility by agents other than its owner, is essential for them to be able to offer services in the downstream market. These facilities are often infrastructure facilities, networks or network elements, stadiums, et cetera, but can also be information systems or mechanisms allowing consumers to access services. Quite often, these facilities are exploited by a group of companies which block access to them by undesirable competitors. Since the first case dealt with on American railway networks in 1912, an entire doctrine of case law has focused on these cases. The criterion around which this doctrine is structured, is the impossibility of duplicating or replicating this facility in the economic context of the market in question. In general, justice requires the opening of this resource to those who requested in a nondiscriminatory manner. When the facility's owner competes downstream with other entities looking to access the facility, justice often rules in favor of orientation towards cost of raids to access the facility in such a way that the owner can't subsidize its downstream activity through income derived from the essential facility. Ex-ante regulation frequently applies this case laws to the essential resources found in its sectoral field. Regulating externalities or network effects. When one company's dominance is the result of its ability to mobilize significant externalities or to exploit network effects, regulation is less well equipped to mitigate the effects of this dominance, which can be beneficial to consumers, but can nonetheless limit the innovation that would be the result of more active competition. The idea of the remedies proposed in this situation is to take measures to reduce these externalities by promoting their extension beyond the scope of a given company. This consistent favoring anything that allows for this extension, interconnection, interoperability, standardization, data portability conversion, and so on, that would free up the field of these externalities to be on the boundaries of a single actor. For example, the possibility of converting a file from a proprietary format into another format, freeze users from reliance on a given software publisher. Likewise, another question that comes up where the cost of migration incurred when switching from one supplier to another. Changing bank, operating system, or telephone operator causes many inconveniences, both monetary and non-monetary, and related to the contract signed or regardless of this contract. Breaking the contract, changing ergonomics need to inform multiple third parties, et cetera. A number of provisions relating to the mechanisms for breaking or transferring contracts imposed by regulators can reduce these migration costs. The mechanisms for entering a rare resources market. Industry regulation is also responsible for divvying up public resources that are considered rare, whether take-off or landing slots at an airport, radio frequencies, rites of passage over public lands, the paths of a railway network, et cetera. This distribution is carried out transparently and in a nondiscriminatory way mainly by means of public tenders with a warning being done according to two main methods. Comparing bids based on predetermined criteria or by auction. In extreme case, is the natural monopoly. When one company has a natural competitive advantage due to its production techniques, the more it produces, the lower the prices it can offer, thus eliminating all competition. In this case, drastic regulations have to be implemented so that the company doesn't abuse this monopoly situation. However, quite often, if public entities own some of its capital, displaces the authorities in a situation of significant conflicts of interest.
