ANDREY TSYGANOV: ANALYTICAL WORK REQUIRES RIGHT ORGANIZATION
“Thanks to market analysis, we can say, which barriers to competition development exist, and give proposals how to eliminate these barriers to make life of businessmen and the population easier”, said Deputy Head of FAS at an event in St Petersburg.
“Legal and economic issues of analyzing the state of competition on the markets” Research-to-Practice Conference took place in St Petersburg on 7 February 2020.
In his introductory remarks, the moderator of the plenary session, Head of FAS Legal Department, Artem Molchanov, pointed out:
“This is the second conference on antimonopoly regulation that we organize in St Petersburg. This year there are more than 200 participants; more than 20 universities from various regions are taking part; around 20 regional FAS Offices are present. And we can firmly say that the year of the 30th anniversary of antimonopoly regulation in Russia has started successfully. The Conference agenda includes the basic concept of antimonopoly regulation and a search for new solutions to new challenges raised by the economy”.
Speaking at the Plenary session, Deputy Head of FAS Andrey Tsyganov highlighted some practical issues and outlined the approaches used by the antimonopoly bodies to analyze the state of competition on goods markets.
“This is the first Conference in 2020 from a series of events, where we are trying to explain what we do, what we want from science and why we are active in competition advocacy. This is because not everybody understands the importance of competition. Paradigms can be different and sometimes it is difficult for us to explain that market, competition, choice options for the population – are values of significant importance”, started his speech Andrey Tsyganov.
He informed that the market environment is analyzed in particular cases, comprising investigation of claims and materials on violations of the antimonopoly law, making decisions on merger control to fulfill the plans on analyzing the state of competition on goods markets, as well as execute the orders issued by the Government and the President of the Russian Federation.
Deputy Head of FAS detailed the market study procedure and described the work of the FAS Commission on market analysis (established in 2012).
“The Commission, that I chair, operates on a regular basis; we consider study plans, approve methods and techniques; first, we look as to how a particular market can be analyzed and then launch a study. The findings of market surveys become public and are published on FAS web-site, as well as included in the annual Reports on the state of competition in the Russian Federation1 and are used in our daily work”, explained the speaker.
“Reports on the state of competition, which FAS presents annually to the Government and the President of the Russian Federation, show the main results of market surveys, these materials become available to all members of the Cabinet. It is also an important way to make decision-makers aware of our approaches and the understanding as to what takes place on the markets. We do not simply include some data in the Reports, but we also specify the barriers to competition development and give proposals how to eliminate these barriers in order to make the life of businessmen and the population easier”, continued Deputy Head of FAS.
He drew the participants’ attention that only in 2019 FAS experts analyzed 12 markets, three of which have not been studied previously: the market of heat supply to end consumers, communications services for TV-broadcasting and the market of soybeans for seeding. Also, the FAS Commission on market analysis approved 24 research methods, devising which, in the opinion of Deputy Head of FAS, “sometimes is as complex and important as the study results”.
The speaker also listed the markets that FAS plans to study in 2020. The most interesting of them are the markets of taxi aggregators, tobacco products and alternative nicotine devices, residential apartment housing construction, mineral fertilizers, slaughtering services, motor road repair, sunflower seeds for planting, oil field services and solid municipal waste.
Finally, Andrey Tsyganov stated:
“There will be a new economy; it is constantly changing and very much differs from the one that we are used to and to which the paradigm of our thinking is adjusted. Hopefully, these issues will be discussed at the Conference, and I wish everybody sound discussions”.
Deputy Editor-in-Chief of the “Competition Law” Journal, Valery Bodrenkov, pointed out during the Plenary session:
“The principles of economic analysis of pricing practices to verify whether they conform to the Federal Law “On Protection of Competition” are of considerable practical importance. That is why it is essential to update this act. For example, in view of the situation formed in some sectors, it is appropriate to introduce a “buyer’s market” concept. It is characterized by such phenomena as supply exceeding demand, absence of shortage, intensive competition sellers, economic power of buyers and others. Operating on the “buyer’s market”, an economic entity that formally holds the dominant position, effectively loses market power.
Also, the “Principles” that the staff of the Federal Antimonopoly Service abide to in the course of analyzing pricing policies of particular companies, must be given the status of explanations of FAS collegial body. In my opinion, it will facilitate uniform enforcement of the antimonopoly law. Before approving as the official explanations of FAS Presidium, however, the document should be carefully analyzed and discussed with business representatives”.
1 FAS drafts the Annual Reports on the State of Competition in the Russian Federation under Clause 8 Part 2 Article 23 of the Federal Law “On Protection of Competition”.
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.