IGOR ARTEMIEV: WE SHOULD HANDLE CONSEQUENCES OF THE FOURTH INDUSTRIAL REVOLUTION

Transformation of the economy – i.e., digitalization will require comprehensive “reset” of antimonopoly regulation”, believed Head of FAS

The V International Research-to-Practice Conference – “Antimonopoly Policy: Science, Practice, Education” – started on 19 November 2019 in “Skolkovo” Innovation Centre.

The event was opened by Deputy Head of FAS Sergey Puzyrevskiy who outlined the themes and agenda of the Conference. “It is a jubilee Conference where we can summarize some results of the discussion, which has been carried on for several years already. The theme of the plenary session is dictated by the existing trends: implementation of the National Plan continues in Russia, and we expect this theme to be systematic because the Chairman of the Government of the Russian Federation instructed FAS to draft a National Competition Development Plan for the next 5-year period. We are not done with regulating digital economy, and the fifth antimonopoly package is not finalized yet, we continue developing international cooperation. And these days we cannot turn our back on science and education – this year the first dissertations have been defended on a new academic discipline – Competition Law”.

Head of FAS Igor Artemiev was a speaker at the Plenary session on “New trends of competition policy in the modern conditions”. His report focused on antimonopoly regulation at the modern stage with the emphasis on the digital reality concerns and appropriate antimonopoly regulation.

He pointed out that the first National Competition Development Plan is written in the traditions of the 1980s.

“Now we are working on a new, digital National Plan that will solve the issues of digital future for the next five years”.

Head of the competition authority described FAS efforts towards developing the antimonopoly law and stressed that Russian antimonopoly law is in line with the international standards.

Regarding the modern challenges of digital economy, he highlighted the role of network effects of digital platforms, which gain market power, and artificial intelligence, that can represent both progress and global challenge, an increasing role of intellectual property and big data as well as a cross-border nature of the modern markets.

“The focus of our attention is on mergers & acquisitions and preventative control. Preventative measures are more efficient. For example, FAS order on Bayer-Monsanto deal is more economically efficient since we tried to describe in new terms pre-conditions for setting requirements in a new, precision farming reality”, informed Igor Artemiev.

“30 years ago we did not understand the significant role that the antimonopoly body will play. It is because of intellectual property that the antimonopoly body is becoming the key actor in resolving the new tasks of the global world.  Neither economic bodies, no financiers, but the antimonopoly authority must deal with the consequences of the forth industrial revolution. And we should find a radical but reasonable solution”, underlined Head of FAS.

He also outlined the international and Russian experience of antimonopoly investigations – cases against Google, Amazon, Booking, and Microsoft.

Giving an example of the Booking case, which concerned the parity of prices for hotel services, Igor Artemiev said that FAS have precedent practice associated not only with Booking, but a great number of companies.

“We will be initiating a couple of dozens of such cases because we deal with an established practice that is vicious from the consumer’s point of view. Such practice should be eliminated without distracting the mechanism”, emphasized Head of FAS.

He also gave several examples of anticompetitive practices in the field of intellectual property. In Igor Artemiev’s opinion, the economic picture of the world has transformed, brining new digital monopolies to the leadership positions. Such as “packaging” (situations when buyers that are purchasing a product are forced to buy other goods from the dominant entity); suspending or refusing to produce; banning distribution of competitors’ products; including restrictive conditions in licensing agreements for fixing and maintaining prices on the licensee’s goods.

Head of FAS highlighted that the economic picture of the world has transformed, brining new digital monopolies to the leading positions, which decrease production and transactions costs considerably. Such positions can be used and are used to unlawful ends – restricting competition. That is why new monopolies must be restricted through new antimonopoly regulation.

Igor Artemiev pinpointed improvement of the antimonopoly law, particularly, he described the status of the fifth “digital” antimonopoly package, which has been approved by the Presidium of the Government Commission on Digital Economy. 

Igor Artemiev stated: “We have managed to make arrangements on the “fifth package” but it’s a difficult story, not everybody understands the need for regulatory changes. We have been working on these changes for three years and if the amendments are not passed, we will continue facing adverse consequences that have overwhelmed our markets. There is no time to wait any longer”.

Head of FAS emphasized a special role of international cooperation in antimonopoly regulation.

“International cooperation is a very important theme and we advocated it at the UN. The document drafted by FAS - the Guiding principles and procedures that concern particular mechanisms of international cooperation, was approved. We have been working on it for 5 years with our colleagues, hundreds of countries supported us, particularly, the antimonopoly bodies of developing countries for whom improving cooperation mechanisms at the global scale is the most pressing”, explained Igor Artemiev.

“We should accept that the world is changing and we are slightly behind. The task is that we have an understanding of the key issues of antimonopoly regulation and law as quickly as possible. We have to make decisions, to some extent intuitively and in the dark, perhaps this light of understanding will be lit up in Skolkovo throughout our discussions”, concluded Igor Artemiev.