HEAD OF FAS OUTLINED A NEW VECTOR FOR COMPETITION DEVELOPMENT
It will be concentrating FAS efforts on particular sectors of the economy and regional markets
On 18 September 2019, Head of FAS Igor Artemiev discussed development of competition in Russia, its problems and new objectives, at the Plenary session - “Development of competition policy and legislation in BRICS countries” of the VI BRICS Competition Conference at Digital Business Hub in Moscow.
“FAS is going beyond the protective power and is shifting to systemic macroeconomic measures”, pointed out Igor Artemiev. He reminded about No. 618 Order of the President of the Russian Federation “On the main directions of the state policy for competition development” passed in 2018, which had laid the foundation for competition development as one of the national goals and formed the legal basis to implement it.
“We tried to create a regulatory framework that conforms to the challenges of the epoch, but arrived to a conclusion that it is not enough. So we focused on how we can extrapolate the value of competition across sectors of the economy. Today a system of Road Maps is created that not only controls violations but develops competition, and it is the most important what has happened recently”, added Igor Artemiev. “The National Competition Development Plan will be renewed every five years until it is necessary”.
“Revolutions in industries forced us to make amendments to the law: the concept of network effects, big data, definitions of product and geographic market boundaries. We decided to change the concept of natural monopolies in Russia and many of them will cease to be classified as such, for examples, ports and airports that compete with each other”, pointed out Head of FAS.
FAS has drafted several laws: a ban on establishing state and municipal unitary enterprises on competitive markets, the fifth “digital” antimonopoly package, on a reform of natural monopolies, on the fundamental principles of state tariff regulation, on use of the results of intellectual activity without patent-holder’s consent in the interests of life and health of the population, on antimonopoly compliance, on efficiency of exposing and suppressing cartels.
“Twofold reduction of violations by the authorities was included in the National Plan following one of the direct instructions from the President”, explained Igor Artemiev.
In 2018 such kind of violations reduced by 14%, and by 40% in the past three years.
Participation of small business and socially-oriented non-profit entities in public procurement has increased to 29.7%, and the share of procurement by particular types of legal entities from small and medium business rose to 12.1%.
Head of FAS clarified: “It means that small business has already received for its work 40 billions through public procurement and 20 billions from companies. 60 billions investments in small business is a big achievement”.
The speaker outlined developments in on-exchange trade as a competitive tool to reduce prices, and specially focused on the fight against cartels.
“46 criminal cases on competition restriction have been opened and are under investigation, of which 23 on Article 178 of the Criminal Code of the Russian Federation”, informed Igor Artemiev.
FAS also receives around 100 leniency applications annually to avoid criminal and administrative liability.
Head of the Antimonopoly Service described use of digital tools to expose cartels: FAS-developed software enables to automatically obtain data and analyze them in order to verify conformity to the given criteria, which helps expose anticompetitive agreements.
Among achievements in competition development in 2018, Head of FAS mentioned abolishing the national and intra-network roaming, and suggested the Conference participants to think over abolishing roaming within the BRICS space.
Other goals achieved by FAS include adopting new rules and methods to register and re-register prices for vital and essential drugs.
Regarding tariffs, Igor Artemiev highlighted that the long-term tariff regulation principle is extrapolated to all spheres and a regulatory principle is introduced that stimulates cost reduction: “Tariffs are moving to benchmarking - averaged prices per unit of service, and then tariffs are determined on its basis applying the “inflation minus” principle”.
Considerable saving of budgetary funds is achieved in public procurement: overall more than1 trillion RUB.
“The synergy of FAS powers formed the basis for efficient competition policy in Russia”, summed up Head of FAS. “Combining public procurement, antimonopoly law and tariff policy has generated this synergy effect. We reach the same goals from different dimensions and the “triad” of our powers gives us this opportunity”.
In conclusion, talking about the importance of experience exchange, Igor Artemiev stressed:
“We have learned a lot from you and we will continue learning”.