ABUSE OF MARKET POWER IS UNACCEPTABLE NOT ONLY BY THE SELLER, BUT ALSO BY THE BUYER
Andrey Tsyganov, Deputy Head of FAS Russia, told about antimonopoly enforcement in relation to monopsonies* during the 21st session of the Intergovernmental Group of Experts UNCTAD
Support and development of competition is one of the priorities of the state policy of the Russian Federation. This work includes, in particular, protection of the legitimate interests of market participants in a monopsony – when there are many producers and one buyer.
Antimonopoly authorities may face a number of difficulties when considering monopsonies and proving the fact of violation.
FAS Russia has a methodology for calculating market share in the case of more traditional violations of antimonopoly legislation, however, in the case of monopsonies, the market power of buyers to a greater extent is based on their bargaining power, and the determination and calculation of such power requires special analytical tools and analysis of a larger amount of information.
Besides, Russian legislation does not contain concepts related to monopsonies, including "monopsonically low price" or "negotiating position of buyers".
Andrey Tsyganov also stressed that in the case of monopsonies, it is important to assess the buyer's intentions and the effect of their actions on the state of competition, as well as to analyze all parts of the value chain. As the speaker noted, if monopsony has a positive impact on the state of competition or on the welfare of consumers, the competition authority may decide not to interfere in the actions of buyers.
At the end of his speech, Andrey Tsyganov added that in many cases of monopsony FAS Russia often acts as an intermediary between producers and buyers and uses soft law mechanisms, including compliance, development of best industry practices and much more.
* Monopsony – the monopoly position of the buyer of the goods with a large number of competing manufacturers. In a market economy, it can lead to the same negative consequences as a monopoly.