Practitioners commonly distinguish between “ex ante regulation” and “ex post regulation.” Various countries have adopted competition policies that rely, to varying degrees, on mixing elements of these two approaches.
Ex ante regulation
Ex ante regulation is anticipatory intervention. Ex ante regulation uses government-specified controls to
- Prevent socially undesirable actions or outcomes in markets, or
- Direct market activity towards socially desirable ends.
Ex ante regulation is mainly concerned with market structure, that is the number of firms and level of market concentration, entry conditions, and the degree of product differentiation.
Ex ante regulation often takes the form of sector-specific regulation.
Ex post regulation
Ex post regulation addresses specific allegations of anti-competitive behavior or market abuse. Ex post regulation aims to redress proven misconduct through a range of enforcement options including fines, injunctions, or bans.
Ex post regulation is mainly concerned with market conduct — the behaviour of a firm with respect to both its competitors and its customers.
Ex post regulation often takes the form of competition laws (or anti-trust laws, as they are called in the US).
RELATED INFORMATION
Advantages and Disadvantages of Ex Ante versus Ex Post Regulation