SERGEY PUZYREVSKIY: NEW LEGAL TOOLS ARE NECESSARY FOR THE DIGITAL ECONOMY

“The idea of the “fifth package” of amendments is that we should apply correctly the antimonopoly law to the market power enclosures that have been formed”, said Deputy Head of FAS Sergey Puzyrevsky on 12 April 2018 at the XIV Annual Legal Forum of  Russia organized by “Vedomosti” newspaper.

In his view, the world economy is at the forth stage of industrialization related to cyber-physical systems – it is digitalization of practically all goods markets.

Modern markets are considerably different from those that existed just 5-10 years ago. They are characterized by multi-sidedness, rapid development of innovative markets, the global goods turnover that literary erases geographical boundaries, new methods of monetization and manageability of intellectual property.

To respond to all these modern challenges from the market, the antimonopoly law should be modernized. To this purpose, FAS has drafted and brought up for discussion the “fifth antimonopoly package” of amendments.

The first objective of the novelties is to understand who dominates the markets and what conditions that dominance. Market power of many companies is now built up on possessing big data bases and on the network effect rather than the volume of tangible assets.  That is why the definition of dominance is changed and its main factors are revised.

The amendments also include the concept of price algorithms, which have become an integral part of the digital economy and often bring not only benefits and development for companies by also a threat to competition. To eliminate such threats, new legal tools are necessary, which FAS has proposed.

Finally, Sergey Puzyrevsky highlighted another issue that should be sorted out to be consistent with the modern reality: abolishing immunities with regard to intellectual property.

“We often encounter situations when intellectual property is used to monopolize the market, and notorious immunities literally tie FAS hands as a regulator. It is one of the first problems that must be solved”, emphasized Deputy Head of FAS.

Continuing discussing improvements to the antimonopoly law, Head of FAS Anti-Cartel Department Andrey Tenishev presented a draft law on increasing criminal liability for competition-restricting agreements.

“Cartels are a type of embezzlement, a form of fraud that damages public at large and the national economy in general. We insists that liability for such offences should be adequate”, stated Andrey Tenishev.