legisaltions on Market share, is there a cap on how much a business is allowed to dominate the market in UK.?

Question

Due to competition laws, are supermarkets allowed to dominate the market freely without restriction or is there a cap? I know that tesco being the current market leader in the UK is ever growing, does the Gov' keep a check, if there is a cap what is the percentage. Thank you.

Answer 1

I don't know if my answer is going to be useful for you. I can tell you regarding USA where the regulators have this Antitrust law which is competition commission laws in EU. In USA there is a meassure called MMI index which is nothing but the market share squared of all entities in the industry. If this crosses 2000 they say the market is concentrated too much and they restrict company mergers in this industry.
A similar yardstick may be available for the EU competition commission where UK is a partner. EU commission recently won some cases against companies like Microsoft monopolising software markets and some companies like Mannesmann and Vodafone are scruitinesed before there Merger activities are given final approval. In your question Tesco might be able to raise their market share position to any level only if they crossover some limits and then try to merge with someoneelse which can create monopoly position for them then the Regulators come into play to block them doing anything further to raise their market share through acquisitions.