Antitrust authorities are failing to control the power of corporations. To remedy the situation, more aggressive anti-consolidation policies and extensive cooperation between agencies and experts at the international level are needed. This was discussed at the Central Asian Roundtable on Competition 2024, recently held in Almaty, organized by the Agency for Protection and Development of Competition of the Republic of Kazakhstan together with the International BRICS Competition Law and Policy Centre of the Higher School of Economics. The participants discussed topical issues of competition development at the national and international levels.
Marat Omarov, Chairman of the Agency for Protection and Development of Competition of the Republic of Kazakhstan, emphasized that the agency sees its task as expanding competition and improving the effectiveness of antimonopoly policy, especially in socially important markets that have a direct impact on the lives of consumers - food, pharmaceuticals, transportation and digital markets.
“It is extremely important to develop cooperation between antitrust authorities and expert, academic circles at the international level - effective legal regulation has long been unable to be confined within national borders,”
he said.
The plenary session of the roundtable was moderated by Alexey Ivanov, Director of the International BRICS Competition Law and Policy Centre of the National Research University Higher School of Economics (BRICS Centre). The discussion was opened by Frédéric Jenny, Chairman of the OECD Competition Law and Policy Committee. He presented his ideas on how to make competition authorities more effective. First on the list of issues to be discussed, in his opinion, is broadening the goals of antitrust regulation.
“Apart from the fact that competition law should improve the lives of consumers and therefore protect their welfare, we see that there are other economic objectives: sustainable development, equality, all sorts of social issues,”
he believes.
Competition advocacy is very important so that consumers, among others, are aware of the possible benefits of competition and what it means to be an active agent of competition. To be effective, competition law must be understood and trusted. Frédéric Jenny said that international cooperation should be promoted to avoid duplication of investigations - competition authorities, with their scarce resources, should be targeted to be as efficient as possible.
“As a mechanism for cooperation, which does not yet exist but would be useful, we can propose one of two systems. The first option is for competition authorities to review a case jointly. This would ensure consistency of results as well as economies of scale in enforcement. The second possible mechanism is a system whereby competition authorities recognize and give effect to a decision made in another jurisdiction,”
Frédéric Jenny noted.
Teresa Moreira, Head of the Competition and Consumer Policies Branch at the United Nations Conference on Trade and Development (UNCTAD), said that regional initiatives, particularly those involving developing countries, were extremely important.
“They allow countries that are just starting to develop competition policy or are more resource-constrained to benefit from joint action, sharing staff, pooling resources and ideas. This provides real support to less prepared agencies and increases the overall impact on global companies,”
she believes.
Eleanor Fox, Professor at New York University School of Law, speaking about the problems of regulating the digital sphere, mentioned that antitrust agencies, which are limited by the national legislation of their states, are now finding it increasingly difficult to control transnational corporations - and this is despite the fact that global technology giants have already overtaken some countries in terms of their size. Microsoft, for example, has reached a market capitalization of $3 trillion.
“We see regulators in many jurisdictions trying to control the power of digital giants, but it's a very fragmented effort. Often the competition agencies themselves don't always have the technology they need. So convergence, bringing regulators together, is necessary, although very difficult to achieve,” says Eleanor Fox. “The BRICS Competition Centre, led by Alexey Ivanov, is trying to promote this initiative and develop common norms, which is very valuable. The same kind of work is being done in Africa and within ASEAN.”
Cristina Caffarra, Co-founder and Vice Chair, Competition Research Policy Network, Centre for Economic Policy Research (CEPR), believes that the level of economic concentration today has reached unprecedented levels and antitrust authorities are failing to control corporate power.
“We block virtually nothing. Mergers are happening all the time, and the remedies are completely ineffective,” says the expert. “We need a more aggressive policy against consolidation.”
In his report, Alexey Ivanov emphasized that only cross-country cooperation between competition authorities can provide an adequate response to the challenges of economic concentration. The current project of the BRICS Centre is dedicated to cooperation in reviewing M&As within the BRICS through the prism of Section F of the UN Set of Principles and Rules on Competition, the only existing international competition agreement in the world today.
“We conducted a questionnaire survey on the theme of increased cooperation beyond the 2016 BRICS Memorandum of Understanding on Competition Law and Policy Cooperation. All the agencies consider the format of cooperation successful and want to deepen cooperation,”
he said.
It was also proposed to improve efficiency in the exchange of information between agencies, conduct joint market research, and launch joint educational programs to train staff and a single mechanism for filing applications for review of transactions.
Andrey Tsyganov, Deputy Head of the FAS of Russia, speaking about court practice in antitrust cases, noted that it can take years for antitrust cases to be heard in courts, especially those involving new technological markets.
“Therefore, it is very important to strike a balance between the proper speed of making decisions on establishing the fact of violation and applying sanctions to violators, especially in the context of rapid technological changes, and maintaining high standards of proof in cases of violation of competition,”
believes Andrey Tsyganov.
Jafar Babayev, Deputy Head of the State Service for Antimonopoly and Consumer Market Control under the Ministry of Economy of the Republic of Azerbaijan, called the principle of competitive neutrality the most important aspect in the competition policy of Central Asian countries.
“There are many countries in our region that inherited from the planned economy large state-owned companies - so-called natural monopolies, which operate in the field of public utilities, telecommunications, energy, railroad transportation, etc. Compared to the 1990s, the number of these monopolies has decreased, but they still play a very important role in the Azerbaijani economy, and antimonopoly authorities must fight the risk of violation of competitive neutrality,” he said. “Our priority is to ensure equal opportunities for natural monopolies and private sector representatives. We see the key to the success of competition policy today in international cooperation.”
The event was attended by experts and representatives of competition authorities from more than 15 countries of Central Asia and Greater Eurasia (such as Uzbekistan, Kyrgyzstan, Tajikistan and Azerbaijan, China, Georgia, Turkey and Iran), as well as a number of other countries (Hungary and Malaysia, Brazil and Egypt, UK and USA) and representatives of international organizations — UN Conference on Trade and Development (UNCTAD) and the Eurasian Economic Commission (EEC).
Source: HSE Daily
