Competition Development in the Russian Federation...
Transcript of Competition Development in the Russian Federation...
Competition Development in the Russian
Federation: Challenges and Solutions
Andrey Tsarikovskiy
Stats-Secretary, Deputy Head of the FAS Russia
5th BRICS International Competition Conference, November 9th,2017, Brasilia
Federal Antimonopoly Service
FAS Russia today
The main powers of FAS Russia:
• Protection of competition and antimonopoly regulation;
• Control of public procurement;
• Control of natural monopolies;
• Control of distribution of property, resources and rights on a competitive basis;
• Control of anticompetitive actions of authorities.
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FAS Russia - is an independent body of state power,
directly subordinate to the Government of the Russian
Federation.
FAS Russia is represented in each of the 85 constituent
entities of the Russian Federation.
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FAS Russia - Macroregulator
Antimonopoly Regulation
Tariff Regulation
Public Procurement
Control
Public Defence Procurement
Control
Bidding Control
Control Over Foreign
Investments
Pro-competitive nature of
regulation
Optimizing expenditures
in regulated sectors
Customer orientation
Unity of approaches to
regulation
Ensuring the availability
of infrastructure on a
non-discriminatory basis
Синергия полномочий
Antitrust regulation
Tariff policy
Policy in the field of public
procurement, including public
defense procurement
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Synergy
Synergy of powers of the antimonopoly
authority - the basis of the effectiveness of
competition policy
4th Industrial Revolution
New business models - new challenges for
BRICS Competition Authorities
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Новые вызовы
New challenges
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Actions of global transnational
corporations (TNC), operating on
new markets
Globalization Digitalization
It is necessary to increase the responsibility of TNCs on a global
scale
In the era of the new economic reality, violations spread with the speed of light and
the speed of antimonopoly response should match it!
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The structure of antimonopoly cases is changing
Modern markets - modern antitrust regulation
Digital world - "digital competition policy"
Globalization and digitalization of economy
Competition authorities of many countries are currently
investigating cases of violation of antimonopoly legislation
in the same markets against large multinational companies.
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“Global Players”
In 2015, the FAS Russia recognized Google Inc. violated the antitrust laws and
issued a warrant to Google to eliminate the violation of the abuse of the dominant
position in the market of pre-installed application stores in the OS "Android."
Google's penalty amounted to 438 million rubles.
• June 2017, the European Commission fined Google by
$ 2.42 billion.
• April 2016, the Competition Bureau of Canada
completed an investigation against Google.
• August 2016, the case against Google has been
instituted by the Competition Authority of Korea
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FAS Russia filed a case against Microsoft
on abuse of dominant position
Microsoft significantly - from 2 months to 6 calendar days - reduced the
time for adaptation of third-party antivirus software to the operating system
of Windows 10. Such actions led to unreasonable advantages for Microsoft
in the software market.
The company also blocked third-party antivirus software and activated
Windows Defender antivirus software without properly notifying users and
obtaining their explicit consent.
Microsoft Corporation has complied with the FAS Russia's warnings
in full. The case is closed.
“Global Players”
Elaboration of approaches in negotiating transactions of
economic concentration of global players
Development of new methodological approaches to the
consideration of transactions that take into account the specific
functioning of markets and their impact on global markets;
For example, the Bayer / Monsanto transaction - the subject of
control is not seed markets and plant protection products, but
markets for modern integrated technologies;
The development of interaction of antimonopoly authorities in the
process of agreeing transactions.
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“Global Players”
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Risk zones requiring special attention of the competitive
community
Pharmaceutical market
Food market
Digital market
Automotive market
Positive practices:-Solution of global
problems;
-Scientific and
technical progress;
-Dissemination of
technologies
Negative
practices:-Deepening of the
technological gap;
-Reduction of the
well-being of the
population;
-The slowdown in
economic growth
rates
Digital market challenges
1. Aggregation of data (Big Date);
2. Algorithmization of the activity of
digital cartels;
3. Network cartels;
4. Legislation reformation.
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“Uberization” of economics
In all industries, more and more platform-
aggregators collecting demand and supply
and acting as a switch.
Such platforms reduce costs, remove
intermediaries from economic relations and lead to a change in the methods of
monetization.
Example:
FAS Russia and Russian Railways have developed the concept of an
electronic platform for cargo transportation: the client is sent to any nearest car
(including another owner), the cargo transportation service is ordered and paid through
the site or application, the transportation status is monitored on-line without personal
contacts with the staff of Russian Railways. Currently, the electronic platform is working
in a test mode.
The system will save billions of rubles allocated for coordination of orders, will
give an incentive for SMEs to return to transportation by rail, significantly reduce the
empty run, and increase the speed of transportation.
Aggregation of data
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The “click” price
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The cost of a product or service offered by a number of
sites or aggregator programs varies depending on previous
searches and user purchases.
Yandex.Taxi service sets different prices for a trip on the same route using the same time for
different clients. The price varies up to 100 rubles (1,5 Euro) for the route.
“Now we are conducting a testing probe that in some cases can make the trip cheaper”, -
Yandex.Taxi commented.
Uber officially acknowledges that it applies artificial intelligence, which assesses the solvency of
clients and offers them the price they are able to pay.
“The comfortable travel cost for each particular phone varies. For example, a passenger with a
discharged smartphone battery is potentially ready to pay for a trip order almost 10 times more
than the owner of a charged phone”, - Keith Chen, Uber’s head of economic research.
“The algorithm, based on the technology of machine learning, assesses the solvency of clients
using a number of parameters. For example, if a person regularly calls a taxi from a wealthy
neighborhood and travels to a business district, then most likely he is willing to pay more than a
customer from a poor neighborhood”, - Daniel Graf, Uber’s head of product.
“Digital” cartels
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•The new technologies as a way to cartel collusion:
•Example 1:
•In Murmansk, the tender collusion was revealed with the help of price
robots. Violators programmed their auction robots to a minimum reduction
from the initial price. When creating auction robots, two accused companies
programmed the reduction limits in the range of 0.5% to 1% of the contract
initial price, depending on which of them should win the auction.
•Example 2:
•In the near future, the company will be prosecuted on suspicion of violating
the antimonopoly legislation by robot programs that monitor competitors'
prices and set the same prices for their company's products. The potential
cartel here occurs automatically without the direct participation of a person.
Антимонопольное регулированиеIn the era of the digital economy, when examining global
transactions and conducting an antimonopoly
investigation, we need new approaches that are fixed at the
legislative level:
• Approach to the definition of the boundaries of the
commodity market, to the perspective analysis of the market;
• Approach to methods for identifying violations and ways to
consolidate evidence;
• Approach to the correlation of competition law and
intellectual property rights (immunity from the application of
antimonopoly legislation).
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“To do” list
“To do” list
In order to effectively supervise the
digital economy, the legislation needs to
be adjusted:
• Correction of the Law on Protection of
Competition (135-FZ);
• The introduction of antitrust requirements
to pricing algorithms in digital markets.
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BRICS Global Benchmarking
Antimonopoly authorities of all countries will be able to monitor
prices on comparable markets and suppress antimonopoly
violations
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Global benchmarking is used to create
platforms for prices at the international
level
Global platforms should create carrier
platforms for social goods, where all
countries will publish the prices of their
contracts
Efficiency, openness and cooperation
of the competition authorities around
the world - the way to overcome the
challenges of the new economic
reality!
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Memorandum on Cooperation of the BRICS Competition (signed May
19, 2016 in St. Petersburg)
Сотрудничество в рамках БРИКС
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Representatives of the antimonopoly
authorities of the BRICS countries
invite to the sessions of the heads of
the largest transnational corporations
to stop unscrupulous practices and
develop best practices in the
interests of our countries.
Cooperation
The BRICS Coordination Committee for
Antimonopoly Policy was established (at the
level of deputy heads of authorities);
Working groups on pharmaceuticals, food
chains, automotive markets have been
created;
The practical interaction of the antimonopoly
bodies of the BRICS in law enforcement
activities is developing
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Cooperation
Perspective Directions
UNCTAD's Discussion Group on International
Cooperation
• The goal is to use the UNCTAD platform to address the
challenges of the new era.
• Toolkit as a methodological basis for the use of Section F of
the UN Competition Complex.
• Consideration of the best practices of international
cooperation elaborated by OECD and ICN.
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FAS Russia proposes to create a research
platform for the BRICS countries (BRICS
Center):
• collection and analysis of information from the
antimonopoly authorities of the BRICS countries,
• identification of best practices;
• preparation of recommendations and development of
approaches to competition policy, taking into account the
development interests of individual sectors and economies
in the whole BRICS countries in the context of
globalization of world economic relations.
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BRICS Center