ANDREY TSYGANOV: WE DO NOT EXPECT THAT OUR INITIATIVES WILL IMMEDIATELY LEAD TO VICTORY

“Most of our projects are multi-year work” - Deputy Head of FAS outlined FAS long-term projects and methods used at “Pravo-ru” conference

On 27 June 2019, Deputy Head of FAS Andrey Tsyganov was a speaker at the plenary session of the “Market power: competition and antimonopoly regulation: 15-year challenge”. He focused on the changes in market performance, their regulation and in-house transformation of the Federal Antimonopoly Service.

Deputy Head of FAS outlined the methods and approaches used by the antimonopoly body in the changing economic realities and attitudes to market power.  

“We have gone away from primitive arithmetic calculation of shares that a company has on a particular market. Now FAS carries out in-depth surveys of related markets and studies market dynamics. It allows us to evaluate the situation from a different angle. For instance, we see that market share is not equal to market power; it is possible to possess market power without considerable tangible assets. The key technologies, intellectual property rights, platforms, global transactions are becoming of enormous importance. We move to value added chains, but I think that this new term is also getting obsolete. The question now is about complex networks”, saidAndrey Tsyganov.

Another conclusion of Deputy Head of FAS concerns maintaining market power by companies.

“To maintain the power on the market and in the society, companies go to all lengths and use any means, from buying-off competitors and abusing IP rights, lobbyism, use of personal data, manipulating demand and human consciousness, to taking advantage of global inter—state contradictions”, statedDeputy Head of FAS Russia. “Obviously, in such conditions competition policy also must change”.

He added: “We reached a conclusion that prevention of violations is more important than searching for and punishing the violators because it is much more difficult to correct the situation, which already occurred, then to prevent it. Therefore, the FAS Russia pays considerable attention to analytical work and elaborating common rules of market conduct. These are the rules of market access, the rules for using common infrastructure, the institutional market system, the neutrality principle for the government regulator, and much more. We see positive results in some sectors: the markets become more transparent and organized”.

Deputy Head of FAS emphasized that in the modern conditions the role of the authorities in economic policy is essential and it can be both pro-and anti-competitive:

“We had a very right concept 30 years ago legislatively extrapolating the norms of antimonopoly regulation not only to operations of economic entities but also to the authorities. Because half of all cases investigated by FAS were against the authorities upon the facts of restricting market competition by them. I must say, the number is gradually falling down”.

Among the main methods used to transform the antimonopoly body during this period, Deputy Head of FAS mentioned digitalization of in-house and external processes, including digitalization of analytical work, attention to details of legislative regulation regarding decision-making on merger petitions and antimonopoly cases, as well as increasing FAS openness and publicity.

The speaker emphasized that it is the combination of some methods and tools in FAS work that generate positive results in its performance.

He said that “as a result of combining enforcement, competition advocacy and legislative initiatives, for instance, the 7-year projects on abolishing roaming in Russia is a success and it is achieved in the interests of all consumers of telecommunications services and did not harm the operating companies. Our factual studies show that the revenue of those companies increase due to the traffic and increased scope of the rendered services”.

“It is corroborated with another conclusion that we have reached and are guided by. The Federal Antimonopoly Service plays the long game, we do not aspire short-term solutions, and we do not expect that our decisions will lead to a victory today or tomorrow. Our projects on abolishing roaming, countering cartels, the radical transformation of the pharmaceutical market, the tariff regulation reform – all these are multi-year efforts and the list of such projects can be continued. FAS is confident that all of them will ultimately be crowned with success”, concluded Andrey Tsyganov.