Igor Artemiev: to develop competition, joint efforts of all sectoral bodies and regional authorities are necessary

Head of FAS presented an annual Report on the state of competition

The first item on the agenda of the Government of the Russian Federation on 5 October 2017 was the state of competition in Russia. Head of the Federal Antimonopoly Service (FAS Russia) Igor Artemiev presented 2016 Report on the State of Competition in the Russian Federation.

He outlined the main issues in antimonopoly and tariff regulation and the national economic trends, observed by the antimonopoly authority. Igor Artemiev also summed up some results of FAS work and highlighted the main objectives and measures to be implemented in order to develop competition in Russia.

At the beginning, Head of FAS pointed out that FAS started the control-and-supervision reform already in 2016 adopting the “forth antimonopoly package”.

“With this law, we have reduced significantly administrative burden upon the business community. Another novelty – immunities for small companies”, continued Igor Artemiev. “This way FAS is able to focus on the violations that are important for competition protection and development”.

“Through expanding the institutions of warnings and admonitions, the number of antimonopoly cases dropped down twofold. Their structure has also changed, though. Advancement of digital technologies by far outruns the regulatory framework, which has led to abuses on innovative markets by some companies. Last year, for instance, FAS finalized a case against “Google” and the company paid more than 438 million RUB fine for violating the law. It restored competition on the market of mobile applications. To prevent such abusing, however, amendments should be made to “On Protection of Competition”, added Head of FAS.

The main theme of 2016 Report on the State of Competition was “Pro-competitive Tariff Policy”. “We identified several blocks of issues that require immediate solutions. First, there are no systemic and consistent normative legal acts on tariff regulation. It generates enforcement problems and has an adverse impact upon operations of economic entities and development of the economy in general”, said Igor Artemiev. “Second, in the past ten years the tariffs of natural monopolies have been growing continuously, which traditionally is one of the most serious obstacles for business”.

“Third, regional tariff regulators exceed the ceiling values given in the social-and-economic forecast. The document sets the growth of tariffs to electric power transmission at 3%; however, setting tariffs, the tariff regulators of the subjects of the Russian Federation consider investment programmes of grid companies, and ultimately exceed the ceiling value, which leads to a considerable tariff growth”, emphasized Igor Artemiev. “FAS has drafted a law eliminating this gap and forwarded it to the Government”.

At the end of his speech, Head of FAS presented the proposals of the antimonopoly body to help competition development, in particular, adopting the National Competition Development Plan, abolishing the Law on natural monopolies and reforming tariff regulation.

“And the most important – FAS together with sectoral ministries and regional authorities should make every effort to develop competition in Russia”, concluded Igor Artemiev.