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Andrey Tsyganov: the rules for regulating the activities off digital giants will help to establish competition in this segment

16.10.2020
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This point of view was expressed by the Deputy Head of the FAS Russia, speaking at a round table in the framework of the XV All-Russian Science Festival at the Faculty of Economics of Moscow State University. M.V. Lomonosov.
During the discussion, experts talked about the 'dictatorship' of digital giants: why their market power is growing and how to deal with it.

During his speech, Andrey Tsyganov, Deputy Head of the FAS Russia, noted that among the ten largest world firms, seven are digital: "According to many experts, leading digital companies are among the most efficient and ideal investment targets. By 2030, if the economic growth of these companies continues, their share could amount to about 2.5% of the country's gross domestic product. In this case, the possibility of political influence and other methods of influencing people will become much more significant than it was a hundred years ago, - said the representative of the department. "But the companies that are at the top of the top 10 are suspiciously not competing with each other. One gets the feeling that they have shared this market and at some points even help each other. This is a large-scale monopolization of the sphere. "

Andrey Tsyganov noted that digital platforms are something without which it is absolutely impossible to imagine your life. It was these companies that made the level of globalization and the penetration of new technologies that exist now possible. However, there are negative consequences, as well. Different groups of stakeholders operate in digital markets. Even if end users express complete satisfaction with the services of the largest digital companies, their relationships with smaller competitors, as well as with firms seeking to place their products on the basis of large platforms and other services, raises many questions from competition authorities around the world. "It is necessary to develop appropriate tools for influencing digital companies to create comfortable conditions for all market participants. These rules are necessary. They will not bring anything fundamentally new to the activities of companies. Nobody talks about structural unbundling and price-fixing. What is worth doing is to tackle issues related to macroeconomic assessments of the state of competition. For example, to figure out why the rate of return for some companies significantly exceeds the average rate of return that develops in the economy as a whole," the speaker emphasized.

According to Andrey Tsyganov, experimental legal regimes ("regulatory sandboxes") should include elements of antitrust regulation. At the same time, the development of rules of behaviour for digital giants should allow using the potential of these companies and prevent freezing investments and slowing down technological progress.

The deputy head of the FAS also focused on the fact that in the digital world there are three main categories of resources for which participants in digital markets compete: investor money, intellectual property and consumer data. In his opinion, market assessments and calculations, which are necessary to understand the market power of companies, should include an assessment of qualitative parameters. This will be the answer to the following questions: Why one company can attract billions of investment money, while others cannot? How many patent pools have digital giants created, and how many of the registered patents are they using, and how much is dead weight so that no one gets them?

Andrey Tsyganov noted the relevance of the existing approaches to the application of antitrust legislation: "There is a well-known postulate that says: big does not mean bad ... First of all, we do not assess the size of companies, but their behaviour. And we do this according to clear criteria that are based on the basic approaches that have developed in the theory of competition and are actively applied in practice in many countries. According to the rules that society and the state consider acceptable to ensure a balance of interests of all market participants" he said.

The speaker believes that modern regulatory and law enforcement practices should be formed in cooperation with all market participants: "Even though Russia does not have such large scale digital companies, but processes are taking place, including the monopolization of the market. Dialogue with companies that are interested in the emergence of rules for regulating their activities in the Russian segment of the global digital market will help develop competition in this area, "concluded Andrey Tsyganov.

Source: https://fas.gov.ru/news/30637