REPRESENTATIVES OF FAS AND ST PETERSBURG STATE UNIVERISTY ON ANTIMONOPOLY REGULATION OF COLLECTIVE BEHAVIOUR IN THE MARKETS

On 8 February 2019, St Petersburg hosted anInternational Research-to-Practice Conference on “Antimonopoly regulation of collective conduct of economic entities in the markets”

Opening the discussion, Deputy Head of FAS Sergey Puzyrevskiy highlighted three trends in the modern antimonopoly regulation: evaluating markets in the realities of the digital economy, extrapolating the norms of antimonopoly regulation to the results of intellectual property and countering cartels in the context of digitalization.

“Back in the XIX Nathan Rothschild said: “The one, who owns information, owns the world”. 200 years later meaning of this phrase has become even more important. Nowadays, access to big databases is a gateway to control over the markets, providing market power to the companies operating in the digital field.  Digital platforms have gained enormous power and practically escaped antimonopoly regulation. The fifth antimonopoly regulation, recently submitted to the Government for consideration, will resolve the issues. We are specially discussing amendments on abolishing “immunities” for intellectual property and tightening liability for cartels”, clarified Deputy Head of FAS.

Head of FAS Legal Department Artem Molchanov drew attention of the Conference participants to the conceptual framework of the antimonopoly law. Currently, the Federal Law “On Protection of Competition” separate individual and collective monopolistic activity; agreements and concerted actions are delineated.

He emphasized: “The concepts of “agreement”, “concerted actions”, “cartels” as a type of an “agreement” are clearly defined in the law and do not require additional explanations. A cartel is nothing but an agreement and it is immersed in a definition of an “agreement”.

Deputy Head of FAS Legal Department, Konstantin Aleshin, made a report on the phenomenon of phantom competition as a form of collective restriction of competition.

“Phantom competition is actions of economic entities aimed at competition restriction; but instead of violating “traditional” bans, it is done through creating a veneer of competition. Thus, companies fence themselves from antimonopoly control and raise market entry barriers for potential competitors”, informed Konstantin Aleshin.

As it was pointed out, phantom competition can exist as a form of misleading potential market participants in order to prevent competition on the market. The antimonopoly body can consider phantom competition as a form of monopolistic activity.

Deputy Head of FAS Anti-Cartel Department, Mukhamed Khamukov discussed economic analysis of the circumstances and the state of competition in cartel cases. In terms of economic methods of exposing and the specifics of proof, cartels can be divided into two big groups: cartels on the goods markets and bid-rigging cartels. He pointed out that 15 typical signs can be used for a preliminary screening of a market to find out whether a cartel can be formed on the market in question: the number of sellers, the number of buyers, market entry barriers, a jump in income and so on.

At the same time, any external signs do not mean that a cartel exists; it is only a signal for the antimonopoly body to look at the picture more carefully. Thorough studying is required to establish the reasons of companies’ conduct.

“A conclusion on the fact of violating the antimonopoly law should be based on direct evidence or sufficient totality of indirect evidence, which may include data obtained through economic, mathematic or statistical analysis”, summed up Mukhamed Khamukov.

Head of Commercial Law Department, St Petersburg State University, Editor-in-Chief of the “Competition Law” Journal, Vladimir Popondopulo outlined an opinion regarding freedom of doing business and interlinking with the antimonopoly law. Dmitry Petrov, an Associated Professor of Commercial Law Department, St Petersburg State University, reviewed self-regulation practice as the foundation of collective conduct of economic entities on the markets.

The Conference was organized by FAS, St Petersburg State University, and the “Jurist” Publishing Group.