ANDREY TSYGANOV HIGHLIGHTED FAS EXPERIENCE IN THE FIELD OF COMBATING DIGITAL CARTELS AT THE ANNUAL CONFERENCE OF THE INTERNATIONAL COMPETITION NETWORK

On September 16, FAS Deputy Head Andrey Tsyganov became a key speaker at the plenary session of the International Competition Network (ICN) Working Group “Big Data and Cartelization” co-chaired by FAS.

The meeting took place within the framework of the International Competition Network Annual Conference, which is being held online for the first time in 2020.

In his speech, Andrey Tsyganov noted that today digital technologies are actively used not only in a positive way, but also for the purpose of market monopolization and cartel agreements.

“Digitization has changed the way cartels are formed and sustained. In the era of artificial intelligence, digital platforms and big data, companies are increasingly using programs based on machine intelligence and algorithms. At the same time, it allows companies to organize and maintain collusion without any formal agreements or interaction between people”, he said.

Andrey Tsyganov noted that FAS already has experience in identifying digital cartels and highlighted the features of considering a large cartel case between oil traders, which was disclosed by FAS in 2020. The case set a precedent not only because it contained digital aspects, but also since it became the first cartel organized on the exchange trade.

“As for typical cartels, we have a developed methodology for collecting and analyzing evidence, and we know exactly what information electronic trading platforms have. But if we talk about collusion of traders on the exchange, then we had to go this way from the very beginning", - he explained.

In addition, since FAS is one of the few competition authorities in the world that regulates public procurement procedures, Andrey Tsyganov focused on a number of bid rigging cases, noting that over the past four years, about 20 tenders in various regions of Russia were conducted with the use of auction robots.

Following up the discussion, the participants discussed the issues of developing new tools and supporting measures to effectively combat digital cartels.

Speaking about the use of new technologies in the investigation of cartel cases, Andrey Tsyganov noted that FAS has developed, implemented and successfully used a system for identifying and proving bid rigging. Later it was transformed into a large project called Big Digital Cat.

“This project is constantly being modernized and adapted to new realities. Currently, we can say that we are using systematic rather than pinpoint detection of bid rigging by analyzing open source data. In addition, we are actively cooperating with other interested federal authorities on the development of the Cat. This helps to increase the transparency of procedures for state and municipal procurement and increase budget savings”.

Summing up, Andrey Tsyganov noted that in addition to using digital technologies to detect and suppress cartels, FAS is actively using more traditional measures: competition advocacy and mechanisms of international cooperation.

“We have recently released a number of methodological recommendations that we developed in close cooperation with leading Russian lawyers and experts, in which we described the proposals on how to identify and prevent cartels in the digital age. We have introduced the terms “price algorithm”, “auction robot” so that consumers and businesses have a correct understanding of the problem of digital cartels. The recommendations not only describe the permissible and prohibited practices of using digital technologies in the interaction of market participants, but also provide specific examples of cases considered by the central and regional offices of FAS”, - the speaker said.

“To overcome challenges, we are constantly improving, cooperating with foreign colleagues, sharing our experience and adopting best practices. At the international level, we constantly declare the importance of combating cartels. the created contact group on cartels, ”summed up Andrey Tsyganov. In particular, while modernizing the Cat, we are actively interacting with our BRICS colleagues within the framework of the recently established Contact Group on Cartels. The issue of combating transnational cartels is included on the initiative of FAS into the agenda of the next UNCTAD competition conference scheduled for October 2020”, Andrey Tsyganov said.

* The ICN Annual Conference is held from September 14 to 17, 2020. The heads of the competition authorities of France and Greece - Isabelle de Silva and Ioannis Lianos, Deputy Head of the Italian Competition Authority Gabriella Muscolo, and Richard Powers, Deputy Attorney General, Competition Department, US Department of Justice, also took part in the plenary session of the ICN Working Group on Cartels.