Anatoly Golomolzin: digital economy gives new goals and challenges to regulators and we should be ready for them

Deputy Head of FAS emphasized:  “The law should be refined to significantly enhance our efficiency under the new conditions of digital economy. New regulations are already being drafted”

On 27 October 2017 Deputy Head of FAS, Anatoly Golomolzin,and Director of “MTS” Department for Managing Regulatory Risks Andrey Rego chaired a session “Digital economy and antimonopoly regulation of telecommunications and IT”.

Experts discussed the most pressing aspects of digital economy, studied the latest legislative changes in communications and the issues of competition protection in IT.

According to Anatoly Golomolzin, the modern world has changed radically: it used to be that the leading companies were from industrial or raw materials segments, now the top-5 are for the digital sector.

He pointed out: “The market power of those companies emerges due to the factors that are not typical for enterprises in the industrial sector: operating big data bases, holding a pool of intellectual property rights, applying new economic algorithms. Because of this the companies practically conquer the world”.

If such companies breach the antimonopoly law and abuse their dominance, competition authorities should be able to counter them.

FAS has competences and ability to withstand large digital players on the market.  As an example, Anatoly Golomolzin gave cases against “Apple”, “Google” and “Microsoft”.

Then Head of FAS Department for Regulating Communications and information technologies, Elena Zaeva talked about emerging new goods that traditionally were always considered as different goods, but in the digital economy they function as a  unified package.

“Goods in the digital economy are a very complex object. They circulate in a totally different manner in comparison with traditional goods. For example, a software-hardware suit. It is a complex object that has simultaneously software, hardware and is used to provide delivery and maintenance services. All this is based on a single licensing agreement. Emergence of such goods gave rise to specifics of determining the product market boundaries”, said Elena Zaeva.

The difficulties of defining market boundaries are related to substitutability. In her opinion, establishing substitutability of new goods is very difficult, and ascertaining а substitutability of new goods and traditional goods is even more complicated, and FAS also has to do it, analyzing markets. Giving an example of market analysis, Elena Zaeva mentioned a case against “Microsoft”.

Mikhail Bykovsky, Deputy Director, Department for Regulating Radio Frequencies and Communications Networks, the Ministry of Communications; Evgeny Bolshakov, an advisor for “Egorov, Puginsky, Afanasiev and Partners” Law Offices; Lyudmila Biryokova, a member of the Federal Council, the Federal Assembly of the Russian Federation, and Dmitry Seryogin,  an advisor, “Yust” Law Firm, also took part in the session.