Statement of Igor Artemiev, Head of the FAS Russia, to the international competition community on COVID-19

17-04-2020 | 14:00

The coronavirus pandemic has affected all the inhabitants of the planet. Governmental authorities and private companies are restructuring their work, predicting the effects of quarantine and looking for possible ways out.

Today, the economy is faced with a number of problems different from those that we faced in previous years.

In the current circumstances, reducing the spread of COVID-19 is our new national goal, and the Government of the Russian Federation is taking all necessary measures to combat the spread of new coronavirus infection in the Russian Federation, ensuring sustainable economic development and supporting citizens in a pandemic.

The protection and development of competition is especially important when companies and the economy as a whole are affected by crisis conditions and markets operate in exceptional circumstances.

The FAS Russia, as a guarantor of compliance with competition laws, should not only protect the economic structure that the country found itself in during the pandemic, but also continuously develop measures that will allow less painful economic recovery and lead the economy to success after the crisis, keeping in mind that competition is the foundation of successful economic development.

The coronavirus pandemic will end, but there will remain a noticeably damaged economy, which we all will need to help to recover. In order to recover with the least loss, today we must take care of the long-term health of our economy and take adequate response measures.

We understand that in current circumstances, the number of anti-competitive practices, cases of abuse of a dominant position and cartelsmay increase, and the competition authorities arerequired to hold a retaliatory strike and suppress any such actions. 

By controlling the situation today we, as far as possible, provide ourselves with a more stable economic development in the future.

In this regard, the FAS Russia, being at the forefront of the fight against coronavirus, daily monitors the price situation in the markets for essential goods and in markets affected by a pandemic, monitors the absence of a shortage of goods and takes measures for such important social goods like medicines, medical products and food.

An operational headquarters has been created at the premises of the FAS Russia and its regional offices, which monitors prices and the absence or presence of a shortage of goods daily. The FAS Russia also launched a special hotline that can be used by any resident of the country, any enterprise.  Having received information about a possible violation or the existing shortage of any product, the FAS Russia immediately takes control of the situation.

Today the situation with the availability of medical masks for sale has gradually begun to improve: the number of subjects where we recorded the absence of medical masks for sale is beginning to decline. In particular, this was facilitated by the increase in domestic production, as well as the supply of products from abroad.

In relation to unscrupulous companies intending to cash in on a difficult epidemic situation, proceedings are underway.

According to the results of the FAS Russia monitoring, which provides for fixing prices in chain stores, working meetings are held with large retail chains to discuss measures to reduce prices, anti-cartel checks are conducted in cooperation with prosecution authorities. If, as a result of the checks, the facts of a conspiracy or a deficit are confirmed, the guilty companies will face punishment in the form of fines and their management may face criminal liability. 

At the moment, the agency issued warnings to representatives of associations of manufacturers and companies that have publicly called for higher prices for goods.

We encourage stores to use as few entities as possible in the purchase chain, since the price of the product rises at each stage of the purchase, which ultimately seriously affects its total cost. An increase in the share of direct purchases of goods from importers, manufacturers and a decrease in purchases from intermediaries will reduce current retail prices.

We are also in dialogue with the Association of Internet-trading companies, adhering to a unified position on the need to suppress unfair practices on the part of online retailers, leading to higher prices.

In order to prevent the spread of false information about the treatment of COVID-19, the FAS Russia is closely monitoring the advertising market.

The FAS Russia also informs SMEs on support measures and provides explanations on working under conditions that impose various restrictions. In particular, the FAS Russia has prepared clarifications on the possibility of concluding additional agreements to lease contracts for state or municipal real estate, concluded as a result of tenders with small and medium-sized enterprises. Besides, we are also currently discussing the possibility of providing the SMEs with the rent payments extension and postponing.

The FAS Russia also prepared clarifications on controversial issues in the field of public procurement and procurement of state-owned companies for the formation of a unified practice of law enforcement by the FAS Russia central and regional offices when considering complaints and conducting inspections.

Besides, a big step in ensuring the continuity of law enforcement processes is the ability to remotely consider complaints about tenders in the areas of land, concession, natural law, privatization and bankruptcy.

In addition, the FAS Russia is currently accumulating the experience of foreign colleagues and is studying global practices of changing antimonopoly responses in a pandemic. The FAS Russia monitors any changes in the antimonopoly response taking place in the world, and tries to harmonize its activities in accordance with best international practices. Like abroad, the FAS Russia is working on the possibility of simplifying the M&A review, as well as introducing some exemptions from antimonopoly legislation if the consumer benefits will exceed the likely damage to competition.

I believe that in the current environment, cooperation and exchange of experience between the competition authorities is crucial for assessing the economic response to crisis situations caused by the pandemic and analyzing their consequences for competition both at the national and global levels. We also welcome the efforts of international organizations, such as the OECD and the International Competition Network, in this direction.

We are convinced that the measures taken today will allow the consumers, businesses and the economy as a whole to recover as quickly as possible.

We are in close cooperation with executive authorities, business, including the most affected enterprises, retail chains, e-traders,leading lawyers, and our foreign colleagues, since a global response is required to defeat a global adversary.

Maintaining competition in the long run is crucial for the benefit of consumers, the functioning of markets, our national economy and the global economy as a whole. As during past economic crises, the efforts of competition authorities and policies to promote and protect competition will be vital to managing the effects of the crisis and creating the best conditions for economic recovery. Protecting the competitive nature of markets will, to the extent possible, contribute to the most painless economic recovery.

 

Igor Artemiev

Head of the FAS Russia

 

 

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