IGOR ARTEMIEV: COMPETITION DEVELOPMENT POLICY MEANS EFFICIENT DETERRENCE OF NEGATIVE TRENDS

Head of FAS discussed the role of the state in competition development, changes in antimonopoly enforcement in the digital epoch, public procurement reforms and prospective directions of cooperation between FAS and the European Commission with the Ambassador of the European Union to the Russian Federation

On 20 December 2019, Head of the Federal Antimonopoly Service Igor Artemiev held talks with theAmbassador of the European Union to the Russian Federation, Markus Ederer.

Head of FAS pointed out a long-standing bilateral cooperation between FAS and the European Commission under the frame of investigating antimonopoly cases and expressed hope for a closer interaction and deep studying of the practice of the European Commission on antimonopoly enforcement.

Regarding digitalization of the economy and new challenges facing antimonopoly regulators, Igor Artemiev stated that developing competition in the digital epoch and adopting the norms of the antimonopoly law to the digital is one of the key areas of FAS work. In this context, FAS devised the “fifth antimonopoly package” the purpose of which is to improve antimonopoly regulation under the conditions of the digital economy. The amendments account for market power based on network effects – big data on sellers and buyers and use of online-platforms.

Head of FAS informed foreign colleagues about developing new approaches to investigation of antimonopoly cases that have a cross-border effect, particularly, the “Big Digital Cat” software created to combat digital cartels.

Discussing the role of the government in developing competition in Russia, Igor Artemiev described the National Competition Development Plan adopted in the Russian Federation:

“We have drafted 18 sectoral Road Maps to fulfill the National Plan. We visited all regions of Russia twice, and together with Governors we approved programmes for their regional work. We drafted 11 federal laws that should formalize this long-term competition-development formula. By 1 April 2020, FAS must devise a new National Competition Development Plan for the next five years. Today the policy on developing competition in Russia can be characterized as efficient deterrence of adverse trends”.

Head of FAS also highlighted the problems on the pharmaceutical markets – fixing monopolistically high prices by manufacturers and refusing to supply medicinal drugs. As the response measures against the conduct of the Big Pharma, Igor Artemiev emphasized the work on a draft law about forced licensing and price regulation based on comparing prices in reference countries.

“If a company refuses to supply some drugs to Russia, the Government of the Russian Federation can assign a Russian laboratory to manufacture it and compensate fair royalty to the right-holder. A similar legislation exists in the USA, it has been applied more than 1000 times; such acts have also been in use in India and China. Only Russia still does not have such a law that would protect the interests of our people in this sensitive and vitally important field”, commented Head of FAS the draft law on forced licensing.

He stated that FAS has been conducting comparative analyses of expensive vital and essential drugs in Russia in contrast with the reference countries since 2016. Following the studies, 1150 registered cup ex-works prices have decreased significantly for 272 trade names of vital and essential drugs. The average price reduction is 42%.

The Ambassador of the European Union, Mr. Ederer, also asked Igor Artemyev regarding the upcoming reform of the public procurement system: in particular, the lifting of direct prohibitions on the purchase of foreign goods, as well as the impact of the application of the “third extra” rule and measures of price discrimination of foreign goods on the state of competition in this sphere.

The head of the FAS linked the reform of the public procurement system with the development of exchange trading, thanks to which it was possible to obtain “fair market prices”.

“Thanks to organized (exchange) trading, we were able to get price indicators and understand where the fair market price is. In addition, we created an electronic bidding system that records all purchases and today we see not only all tenders and bidding procedures in electronic form, we also see all prices and all contracts - closed and open throughout Russia”.

Igor Artemiev outlined FAS experience of international cooperation, particularly, the efforts through UNCTAD and BRICS.

At the end of the meeting, Markus Ederer thanked Igor Artemiev for the warm reception and invited a Russian delegation to take part in the international conference on pharmaceuticals that the European Commission plans to organize in 2020.

Other members of the delegations at the event included:

Representatives of the Delegation of the European Union to Russia  – Tomáš Kuhtic, an advisor to Economics and Trade Section; Sergey Sudakov, an expert of Economics and Trade Section; Anna Young, a specialist on communications and information technologies policy, the Delegation of the European Union to Russia;

FAS representatives – Head of FAS Department for Control over Social Sphere and Trade, Timophei Nizhegorodtsev; Head of FAS Legal Department Artem Molchanov; Head of FAS Department for Regulating Communications and Information Technologies, Elena Zaeva; Head of FAS Department for Control over Public Procurement, Artem Lobov; Head of FAS Department for Industry Control, Nelli Galinkhanova; Head of FAS Department for International Economic Cooperation, Lesya Davydova; Head of FAS Anti-Cartel Department, Andrey Tenischev; Head of FAS PR Department, Irina Kashunina; Head of the International Projects Unit, Deputy Head of FAS Department for International Economic Cooperation, Alexandra Feldman.