ARTEM MOLCHANOV: IT IS NECESSARY TO TAKE INTO ACCOUNT DIRECT AND INDIRECT NETWORK EFFECTS WHILE ESTIMATING THE MARKET POWER ON IT-MARKETS

On 12 August an expert discussion on the topic «Digital platforms and terms of prices parity: competition issues on the example of tourism industry», organized by the Analytical Center under the Government of the Russian Federation, was held by videoconference.

Artem Molchanov, Head of the Legal Department of the FAS Russia, dedicated his statement to antitrust requirements for activity of digital platforms and legislative initiatives in this area.

The structure of markets changes in the digital economy as well as the role of digital platforms and information increases significantly. In addition, geographical boundaries of market cease to exist and replaced by global markets.

The speaker also gave some examples of foreign practice of investigations of network effects impact on markets.

«When estimating the market power on IT-markets it is necessary to take into account direct and indirect network effects, «parallel run» of several online services and the opportunity of switching between them, scale economies, access to competitive relevant data and role of innovation. The existence of network effects may lead to monopoly», - Artem Molchanov stated.

Thanks to the «Fifth Antimonopoly Package» prepared by the FAS Russia, it is planned to determine new criteria of dominant position on the IT market, including ownership of the infrastructure used for transactions between sellers and buyers; network effects; share over 35 % on the market of substitutable services for ensuring transactions.

Moreover, for supervising execution of the antimonopoly authority’s order, the category of experts on economic concentration transactions is to appear. The information on examination of such applications is going to be fully transparent, face-to-face and with new criteria – the volume of transactions must exceed 7 billion rubles.

During this event participants also discussed terms of prices parity and assessment of its impact on competition on the example of online-booking market of accommodation facilities and criteria for admissibility of vertical restrains set by online-platforms.

Representatives of executive authorities, expert and business community took part in the discussion.