ARTEM MOLCHANOV: ONE SHOULD NOT UNDERESTIMATE ANALYSIS OF THE STATE OF COMPETITION

The reason is that market is an objective reality, based on which FAS builds its position at Courts and makes decisions investigating cases

On 7 February 2020, Research-to-Practice Conference on “Legal and economic issues of analyzing the state of competition on the markets” included a session   about “Legal aspects of evaluating the state of competition on the markets”. Head of FAS Legal Department Artem Molchanov put an emphasis on the legal sides of analyzing the state of competition.

First of all, one should not underestimate analysis of the state of competition, believes Artem Molchanov.

“We have talked a lot today and still have not come to an agreement about the concepts. In practice, we should apply comprehensible, well-defined and predictable solutions and explain our standpoint at Courts in a user-friendly language”, thinks Head of FAS Legal Department.

The speaker also emphasized that defining the market is the basis for applying the norms of the antimonopoly law: “Competition is rivalry between economic entities on a relevant market, i.e., everything in the law is related to this basic concept. If we are unable to find the right definition of the basic element of market, we will not be able to prove anything”.

Artem Molchanov gave definitions of the Supreme Court and the Constitution Court of the Russian Federation as an example to underline the basic point that the antimonopoly body “can analyze the state of competition in the scope necessary for a particular case” and “rather than act arbitrary, it should collect sufficient evidence and fully and comprehensibly ascertain factual circumstances related to conduct of participants of economic activity in order to make proper, reasonable decisions”.

The speaker also drew the colleagues’ attention to relativity of analysis as evidence. Wrongly set time intervals, product and geographic market boundaries can result in misleading conclusions about the composition of economic entities operating on the market, market scope and market shares of economic entities, the level of market concentration.

The second aspect emphasized by the speaker is allowability of analysis as evidence.

“Is analysis of the state of competition the only possible evidence for decision-making? Courts cannot take such reports as the only evidence, and Courts may take into account other economic evaluations, expert examinations, etc. Making decisions, the antimonopoly body must, however, analyze the state of competition in accord with the procedure established by the federal antimonopoly body and make a decision in line with these rules”, said Artem Molchanov.

Summing up, Artem Molchanov stated that “market is an objective reality. To assess adverse effects upon competition it is necessary to, at least, determine market characteristics, define the market. The scope of market analyses varies depending on the survey goals and objectives”.

“Market analysis characterizes a particular market, and a decision on a case ascertains a fact of a violation. FAS is guided by this approach in its work. It allows us to employ advance methodologies, at the same time remaining on the right position – parties to a case can also use other arguments, that Courts can take into account as evidence”, concluded Head of FAS Legal Department.

Background:

The event was organized by FAS; “Yurist” Publishing Group; the Competition Law Department at Kutafin Moscow State Law Academy; the Department of Legal Protection of Economic Competition Law, St Petersburg State University; St Petersburg State University of Economics.