IGOR ARTEMIEV: RUSSIA FORMED THE FOUNDATION FOR COMPETITION DEVELOPMENT

However, there are barriers hampering consistent progress of a new competition policy

“In the recent period programme documents on developing competition have been synchronized at different levels. The first level – a Presidential Order on the main directions of the state policy on developing competition. The Order approved  2018–2020 National Competition Development Plan, which is a mid-term plan for developing competition at the federal level with the key targets for the next three years”, said Head of FAS Igor Artemiev presenting the Report on the state of competition in 2017 to the Government of the Russian Federation.

The second level – Presidential orders issued following the State Council; and the third level – approving the Road Map of the Government for developing competition in 18 sectors of the economy.

“Regions actively support the goals of competition. Relevant meetings have been held in 80% of regions and 65 Agreements on Cooperation signed between FAS and regions. Majority of regions have determined and are prepared to approve at least 33 targets for developing competition out of 41 targets proposed by the State Council”, stated Head of FAS.

Then Igor Artemiev moved to sectoral specifics of competition policy. First of all, he highlighted abolishing of intra-network and national roaming, which eliminates discrimination of subscribers by the geographical principle.

Igor Artemiev also covered various aspects of tariff regulation. Head of FAS pointed out that the “inflation minus” policy pursued by the Government continues creating favorable conditions for consumers and development of small and medium business.

“Our efforts allowed to remove unreasonable funds for more than 7.5 billion RUB from regional tariffs”, continued Head of FAS. “We should also mention that another step is made to unify tariff regulation. In April 2018, the Government approved the common rules for considering pre-trial disputes and disagreements in tariff regulation. Thus, 16 acts regulating the procedure for considering pre-trial disputes and disagreements were replaced”.

Igor Artemiev specially focused on enhancing efficiency of public defence procurement. According to Head of FAS, a motivational pricing model was introduce, stimulating companies to reduce their costs and invest in production, while creating a unique specialized site for closed procurement in the electronic form saved  8.5 billion RUB of budgetary funds.

Head of FAS outlined the modern challenges facing competition and the economy. First, it is a changing market structure in the digital economy. In the Report on the state of competition in 2017, FAS explained that foreign companies use digital technologies to monopolize markets and cartels operate through digital algorithms.

“Traditional tools to counter monopolization do not work on digital markets. Together with all interested authorities we must adopt the “fifth antimonopoly package” in the near future, that determines application of Russian competition law under digitalization and in the intellectual property field”, added Igor Artemiev.

Traditionally, cartelization of the economy remains the problem. Head of FAS gave some statistics: in 2017, FAS exposed 360 cartels, which is 8% higher than in 2016.

“Losses of the budgets at all levels can reach 1.5-2 % GDP. FAS has drafted a package of laws aimed at further countering cartels”, said Head of FAS.

Another issue highlighted by Igor Artemiev is an obsolete regulatory framework for natural monopolies. Some markets classified as natural monopolies function in the state of competition, which shows that the current economic conditions are obsolete and hampers development of business initiative.

“Under the conditions of external and internal challenges, reserves of competition are used insufficiently. We have, however, all tools required to create a Russian economic miracle, when demonopolization and development of small and medium business in absolutely fantastic, huge volumes can sharply increase the efficiency of our economy”, concludedIgor Artemiev.