In many instances privatization could result in the transformation of government-owned and regulated monopolies into privately owned monopolies. Competition policies provide guidelines to restructure these industries. Second, most Latin American governments now rely less on direct price control in favor of competitive markets to determine prices for both products and factor inputs.
Competition policies establish rules of behavior to forestall anticompetitive conduct by firms.
Third, through merger firms can gain a larger share of individual markets. The competition policies in several countries seek to limit the growth of market power through guidelines and judicial action preventing certain mergers.