Public interest financial definition of public interest
Also found in: Dictionary
public interest a yardstick used in the application of COMPETITION POLICY in the UK to judge whether or not a particular action or practice pursued by a supplier of a product, or a change in the structure of a market by, for example, MERGER or TAKEOVER, is ‘good’ or ‘bad’ in terms of its effects on efficiency and the interests of consumers.
public interest a ‘benchmark’ used in the application of COMPETITION POLICY (in the UK) to judge whether or not a particular action or policy pursued by a supplier or by a group of suppliers, or a change in the structure of a market, is ‘good’ or ‘bad’ in terms of its effects on economic efficiency and the consumer. For example, it is clearly in the public interest if a firm prices its product at a level that yields it only a ‘fair’ profit return - that is, a profit reward that is just adequate to secure the efficient supply of the product (see NORMAL PROFIT). By the same token, it is clearly against the public interest if a firm profiteers at the expense of the consumer by charging excessive prices (see ABOVE-NORMAL PROFIT). In practice, however, the issue is complicated by difficulties in interpreting data: for example, low profits may reflect a conservative pricing policy or result from the fact that the firm is grossly inefficient. Moreover, there are further complications arising from the fact that particular actions may produce, simultaneously, both beneficial and detrimental effects. In this case a ‘trade-off assessment is required to form a balanced judgement. See WILLIAMSON ‘TRADE-OFF’
MODEL, COMPETITION COMMISSION, RESTRICTIVE PRACTICES COURT.