ANDREY TSYGANOV: IT IS IMPORTANT TO SEE A GLOBAL-SCALE PICTURE OF A MARKET
Deputy Head of FAS believes that “apart from a speed of decision-making, the antimonopoly body also should avoid controversial orders”
On 19 September 2019, Deputy Head of FAS Andrey Tsyganov was a speaker at the session of the VI BRICS Competition Conference on “Tools of cooperation in considering global mergers”. He outlined the experience of the Russian Federation on global mergers consideration and international cooperation tools.
Andrey Tsyganov stated that approving global mergers is directly related to the global nature of operations of market participants and the national character of regulation.
Deputy Head of FAS said: “We sense clearly a contradiction between the global nature of doing-business and the national character of regulation. Competition authorities in different jurisdictions can have different concerns considering the same mergers because markets are organized differently in different countries. It is hard for antimonopoly bodies to issue proper decisions and orders how the merging companies should behave so they do not restrict competition. It is important to have access to information in other jurisdictions, information about emerging concerns, carry out serious market analysis, to understand the global picture of these markets and possible consequences of mergers. Since business wants to do everything quickly, speed and efficient interaction between competition authorities is of considerable significance. Apart from the speed of decision-making, preventing informational asymmetry and controversial orders is essential”.
The speaker gave an example of considering and approving a global “Bayer/Monsanto” merger. In view of the technological progress and digitalization in the world, to understand the dynamics of competition in the agrarian sector FAS applied new methodological approaches to expose adverse impact of a potential merger on competition on both the Russian and world markets.
“Obviously global mergers require particular forms of international control. Soft and transparent cooperation tools are needed for competition authorities to respond to the challenges of the modern economy in view of physical and digital market infrastructure development. Investigating global mergers, we collaborate with different countries and we have concluded that such collaboration can be efficient. Because we face global concerns associated with global mergers”, explained Andrey Tsyganov.
Deputy Head of FAS described the forms and the most efficient cooperation tools, including bilateral agreements, confidentiality waiver, joint investigations of socially important markets, and some others.
He highlighted a project on “Digitalizing state control over mergers” which enables to file petitions online, automatically verify data and provides for automated petition approvals and use of big data in merger analysis.
In FAS opinion, the project will enhance efficiency of informational interaction at the international and inter-departmental levels, create conditions to form sustainable and secure information-and-telecommunications infrastructure for transmitting, processing and storing big data, reduce procedures timelines, and increase transparency of the work of the antimonopoly body.
Andrey Tsyganov reported that “one of Russian proposals relates to a transition to similar protocols and algorithms in different jurisdictions if electronic petition filing will be introduced in our countries. In also concerns unification or harmonization of requirements to be specified in these documents”.
Deputy Head of FAS mentioned cooperation at UNCTAD that was instrumental for drafting and approving the text of the Guidelines and procedures of international cooperation under section F of UN Competition Set, including the provisions on cooperation in merger consideration and waiver exchange.
Finally, Andrey Tsyganov called to intensify cooperation on procedural issues and approximate approaches of different countries in global merger consideration:
“Discussions showed that a lot of issues remain unsolved. At the Conference we were talking how large companies consistently acquire plenty of small firms, when each of such mergers does not restrict competition, but their totality can lead to such consequences. We must understand when the quantity of such mergers forms a crucial mass capable to change the state of a particular market. We propose to intensify our cooperation along the functional directions of our work and put efforts top approximate our approaches to analyzing mergers and acquisitions”.