Andrey Tsyganov explained students of Zurich University specifics of competition law and policy in Russia

13-07-2017 | 08:53

On 7 July 2017, the Competition Law Department of Zurich Applied Sciences University organized a training course on competition law and enforcement. The objective is to present to BA and MA students specifics of development and functioning of different systems of competition law.

The event lecturers were Head of Switzerland Competition Authority, Vincent Martenet; Head of Competition Division, the Organization of Economic Cooperation and Development (OECD), Antonio Gomes; a professor of Georgetown University (USA) William Kovacic. Deputy Head of FAS Andrey Tsyganov read a lecture about developing competition law and antimonopoly policy in Russia.

He talked about institutional design of Russian competition authority. It was founded in 1990 and in its modern form FAS has worked since 2004. Today the Antimonopoly Service is an independent federal executive body, subordinate to the Government of the Russian Federation and has a network of 84 regional Offices operating in all subjects of the Russian Federation.

Andrey Tsyganov pointed out that FAS is a multifunctional body, authorized to consider complaints, analyze the market, carry on investigations, make decisions on the fact of absence of violations of the antimonopoly law, issue injunctions to eliminate violations, impose fines upon violators, control decision execution, and defend its decisions at Courts. FAS is also the only body in the system of public administration that has powers to control observance of the competition rules.  At the same time Russian legal system practically does not have sectoral exceptions and also apply the neutrality principle with regard to public and private companies.

In 2015 FAS functions were expanded considerably through transferring the FAS the powers to control public defence procurement and tariff regulation. These functions were added to the previous functionalities of the Antimonopoly Service, which include: antimonopoly regulation, control over  observance of the law on natural monopolies, advertising and unfair competition, retail trade, public procurement and tenders, foreign investments in strategic companies. Thus, FAS becomes a macro-regulator performing its functions in line with the principles of pro-competitive regulation, costs optimization in regulated sectors, non-discriminatory access to the infrastructure, and the focus on consumer interests. Andrey Tsyganov pointed out that these functions in combination generate a synergy effect, and allow choosing the most efficient method of influencing the market situation.

Then Deputy Head of FAS discussed development of competition law in Russia that started in 1991 when the Law “On Competition and Restricting Monopolistic Activity on Markets” had been adopted. Currently the antimonopoly regulation is conducted in accord No. 135-FZ Federal Law “On Protection of Competition” of 26 July 2006. The sanctions for violating the antimonopoly law are specified in the Code of the Russian Federation on Administrative Violations and the Criminal Code of the Russian Federation.

Andrey Tsyganov said that FAS undertakes ongoing efforts to develop Russian antimonopoly law and make amendments to it that are broad packages of amendments designed to enhance efficiency of Russian competition law and eliminate administrative barriers against business. He described in detail the amendments introduced to Russian law by the “forth antimonopoly package”, such as expanding methods of economic analysis and the institutions of warnings and admonitions, introducing the procedure for preliminary approval of agreements between economic entities on joint work by the antimonopoly body, as well as improving the process of antimonopoly case investigations.

Continuing the lecture, Andrey Tsyganov gave statistics on antimonopoly cases and emphasized the downward trend in the number of investigated cases especially with regard to the authorities. Such reduction of the number of cases became possible due to extrapolation of the institution of warnings to the authorities, which significantly reduced the workload upon the antimonopoly body and increased its performance efficiency. Andrey Tsyganov informed the audience about some high-profile FAS cases, including “three case waves” against oil companies, the case against “Google”, the case against linear container carriers, emphasizing the exterritoriality principle in enforcement.

Deputy Head of FAS also gave a detailed account of approaches used by the antimonopoly service for tariff regulation, including tariff indexation in exchange for costs reduction, focus on consumer interests rather than natural monopolies, stimulating the transition of regulated markets into a competitive state, creating non-discriminatory conditions for access to the services of natural monopolies.

Then Andrey Tsyganov outlined specific FAS functions such as control over the authorities, control over public procurement, control over advertising and unfair competition, as well as control over foreign investments in strategic companies.  

A separate block of questions concerned the practice of competition advocacy and the methods of FAS interaction with different reference groups as well as introducing compliance systems in the Russian Federation.  

Andrey Tsyganov pointed out that FAS pays considerable attention to the work in the regions of the Russian Federation. To intensify competition at the regional level, the Competition Development Standard has been devised, according to which every competition development parameter in a region is included in the methodology for evaluating governors’ performance.

In September 2016 the Government of the Russian Federation instructed FAS to draft 2017-2018 National Competition Development Plan to decrease the role of the governmental sector in the economy and improve investment attractiveness of the Russian Federation. The document is being drafted by FAS in cooperation with other interested federal executive bodies.

A special part of the lecture focused on FAS international cooperation on a bilateral basis as well as in the format of international organizations that deal with the issues of comeptition. Currently international cooperation is of special priority, since the economic reality is such that competition authorities face violations of the antimonopoly law by large transnational corporations and international cartels, and countering such unfair practices across the world becomes the key issue.  

Summing up the lecture, Andrey Tsyganov informed students of Zurich Applied Sciences University about a FAS initiative to draft the Toolkit on international cooperation between competition authorities to counter restrictive business practices of large transnational corporations. It was presented at the 16th session of UNCTAD Intergovernmental Group of Experts on competition law and policy shortly before the lecture.