APEC economies discussed economic aspects of antimonopoly policy
On 22 - 23 February 2017 APEC Competition Policy Working Group held a workshop on “Economic aspects of antimonopoly policy”, organized by Vietnam Central Institute for Economic Management.
Competition authorities of developed and developing countries in the Asian-Pacific Region do not have equal knowledge and experience in investigation antimonopoly cases. Therefore, recently formed authorities in APEC economies face the difficulties of “classical” antimonopoly enforcement, particularly, related to cartel investigation, merger consideration, as well as cases on abusing market dominance. At the same time, the antimonopoly bodies of the entire region must solve the newly emerged tasks of antimonopoly regulation associated with behavioural and platform economy, as well as the issues of collecting and using economic evidence, where developing and strengthening interaction between developed and developing economies is crucial.
Josef Harington, a professor at Wharton Business School, Pennsylvania University, discussed investigation of horizontal agreements and cartels and outline experiences of the US, Thailand, and other countries in applying leniency programmes. Professor pointed out that unfortunately the advantages of leniency programs are most frequently enjoyed by members of “dying” cartels that are no longer stable and stopped achieving the goal, to achieve which they were formed– gaining superprofit. In this context, to induce confession, some jurisdictions (South Korea, the UK, Hungary, Taiwan) give remuneration in money for a person (including physical persons, for example, employees of an organization) who reported a cartel The information should previously unknown the antimonopoly body and serve as a significant piece of evidence of cartel operations.
Another workshop speaker was Chairman of the Competition Committee of the Organization for Economic Cooperation and Development (OECD), Frederic Jenny. He highlighted the importance of economic evidence in investigating antimonopoly cases, particularly, cartel cases, where along with direct and indirect evidence of agreement between economic entities economic evidence can be used, such as market analysis to determine product and geographic boundaries of a goods market, categories of economic entities operating on the market as buyers or sellers. He stated that many antimonopoly bodies often forget about the need for economic evidence in making decisions on antimonopoly cases. The issue can also emerge when the decisions are appealed at Courts.
Frederic Jenny discussed enforcement on rapidly changing markets, particularly, information technologies markets. Professor mentioned software that potentially can lead to violating the antimonopoly law. As an example, there is “Libratus” Artificial Intellect - originally created as a bot for poker that succeeded winning over four best players in the world. The algorithms embedded in the program are capable of solving other tasks, for instance, negotiations. Such programs can potentially be used to form cartels. FAS representatives took part in a follow-up discussion on the consequences of using programs similar to “Libratus” and the issues of proving if elements of violating the antimonopoly in their use are ascertained.
The workshop covered the issue of the best institutional design of competition authorities to facilitate solving the issues that competition authorities face in the part of efficient countering cartels. FAS was emphasized as one of successful examples of organizing the work of a large multifunctional body with decision-making centres not only in the Central Office, but also in its regional bodies.
The workshop outcome was summarized by Rory McLeod, Chair of New Zealand Ministry of Business, Innovation and Employment, and Nguyen Dinh Cung, President of Vietnam Central Institute for Economic Management. The event participants emphasized the utmost need for international cooperation within APEC framework in order to exchange experience in solving global issues and the importance of similar events in the futures.
Deputy Head of FAS Andrey Tsyganov pointed out: “Participation of our staff in such events enables to not only obtain information about the current trends in antimonopoly regulation and investigations in the economies of the Asian-Pacific region, but also share extensive and diverse experience of antimonopoly regulation in Russia, which, undoubtedly will facilitate further cooperation and investigating cross-border cases in APEC economies С”.