Andrey Tsarikovskiy: digitalization of the economy will change the basis of competition

Electronic technologies are transforming all economic and legal systems

State-Secretary, Deputy Head of FAS was a key speaker at the session on “Antimonopoly regulation in digital economy” on 1 June 2017 at St Petersburg International Legal Forum.

“New methodological approaches are necessary in antimonopoly investigations”, stated Deputy Head of FAS. It includes approaches to determining market boundaries, prospective market analysis, balance between the competition law and the law on intellectual property. Andrey Tsarikovskiy raised an issue for discussion: “We cannot already count capital in a traditional way, the concept of price is changing: the “costs plus reasonable profit” principle does not work here”. If we cannot determine a pricing method, how can we find out if it is excessive?”

In his opinion, all this require special market analysis: evaluating all aspects and interrelations, determining geographic market boundaries in view of the activities of sellers, consumers and national specifics of consumption, defining product boundaries of the market in light of goods circulation on the adjacent markets. “The fact that goods are offered to consumers free-of-charge does not mean that sellers will not gain economic benefits from its”, emphasized Deputy Head of FAS.

He also pointed out the complexity of accusations in violations within P2P (peer-to-peer) networks: “Who should be charged in this case? To a company that is a commutator linking users or to an individual?”

He pointed out that development of electronic economy is also a challenge for the judicial system: “Antimonopoly investigations will become evidence of “abnormal behaviour” of a company and Courts should be ready for increasing indirect evidence of the respondents’ guilt”.

Andrey Tsarikovskiy outlined FAS efforts on establishing the legislative framework and employing digital technologies by FAS in antimonopoly enforcement.

He stated: “FAS develops tools for exposing violations, particularly, “digital cartels”, and forms the standard of proof. For instance, the antimonopoly body in the near future is going to hold the company liable for breaching the antimonopoly law by robot-programmes that monitored competitor prices and fixed the same prices for the company products. Here a potential cartel happens automatically without direct human involvement”.

“In our work we are increasingly immersing in the digital sphere”, explained Deputy Head of FAS. “We have developed and are applying a technology to remotely expose bid-rigging, when only using a computer and specialized software we can analyze all tenders in the Russian Federation”.