| Antimonopoly legislation will be made much stricter The government is seeking new reserves to ensure economic growth rates that will double GDP by 2010. Yesterday, antimonopoly authorities, which had not previously shined on the economic front, were involved in solving the common problem. At the board of the Federal Antimonopoly Service (FAS), Deputy Prime Minister Alexander Zhukov set them the task of ensuring fair competition in the country. “Antimonopoly policy, with the right approach, is a powerful incentive for economic and market development. Without competition in the broadest sense of the word, we will not be able to achieve the goal of doubling GDP,” he said.
However, without appropriate legislative support it is impossible to cultivate a competitive environment. The work experience of the former Ministry of Antimonopoly Policy clearly demonstrated this. Therefore, the board decided to change the antimonopoly laws. Moreover, both in terms of control and in terms of punishment. Mr. Zhukov warned those who intend to resist the efforts of the Cabinet of Ministers and continue to profit from monopoly rents. “We need to significantly increase penalties for violating antimonopoly laws, and also ensure that penalties are proportionate to the damage caused to citizens and business entities,” said the Deputy Prime Minister. In addition, he said, the number of benefits and advantages provided to various companies should be minimized. They should be provided only if they do not lead to a weakening of competition.
However, for the antimonopoly agency and personally for its new head, ex-State Duma deputy from the Yabloko party Igor Artemyev, Mr. Zhukov’s proposals did not come as a surprise. Mr. Artemyev himself, when he was a deputy, specialized in antimonopoly issues, and therefore knows perfectly well why the system is stalling.
FAS and MEDT are already preparing a draft of a new competition law. He will join the government in the fall. As Deputy Minister of Economic Development and Trade Andrei Sharonov said at the board meeting, the law is based on a new ideology - the transition from a permitting and warning system to a control and notification system. “The main vector of activity is shifting from preventing possible dominance to identifying and suppressing abuse of dominant position,” he said. In other words, antimonopoly control will not prevent a particular company from developing (including through mergers) and conquering new markets. The main goal is to prevent this company from strangling others.
As confirmation that the state is changing its antimonopoly course, Mr. Sharonov spoke about the upcoming multiple increase in the cost threshold for transactions requiring approval by the antimonopoly service. The threshold increases 100 times - to approximately 1 billion rubles. “This removes from preliminary control a huge number of transactions that do not affect competition, and frees up resources for control over transactions that affect competition,” says Andrei Sharonov.
Those who remain under control will not be envied. After all, under the new competition law, it will be possible not only to run into, for example, the forced liquidation of a merger deal (in a year, the FAS may receive the appropriate powers), but also, as they say, to end up with very, very big money. Fines for monopolistic activities are supposed to be calculated based not on the minimum wage, but on the companies’ annual turnover. “We will collect from the violating company, for example, 3% of annual turnover, the punishment will be commensurate with the income from monopolistic activities that the company received,” says Igor Artemyev. Moreover, it will become easier to prove violations - say, price collusion in the form of cartel agreements. “We will no longer prove the very fact of a cartel agreement or price fixing. As a rule, no documents are signed in these situations. It will only be necessary to establish the fact of parallel economic behavior, that is, cases when, without economic justification, potential competitors simultaneously raise prices,” said Mr. Artemyev.
However, the merger transactions themselves may present unpleasant surprises to some businessmen. The FAS insists that when they are committed, the true owners of companies are identified, even if they are registered offshore. “The point is to stop the practice of approving such transactions if there is no transparent ownership structure,” said the head of the FAS. According to him, increasing the transparency of the Russian economy is a condition for competition policy.
FAS promises that officials will not escape responsibility either. Today, approximately 50% of all cases handled by antimonopoly authorities are cases against governors, regional parliaments and executive authorities, which, as Mr. Artemyev says, “create administrative barriers that impede the development of competition.” After changes in the law, it will become dangerous to create greenhouse conditions for “our” companies by expelling others from the market.
Today this is especially true for construction. Igor Artemyev has long been sharpening his teeth on the monopolized real estate market, especially in Moscow. Yesterday he again sharply criticized the state of affairs in this area. And he received the full support of Alexander Zhukov. The Deputy Prime Minister said that it is necessary to ensure equal access to land, “since monopolization in this sector is now high.” Among the FAS proposals is to distribute land plots exclusively on a competitive basis in order to exclude the negative role of officials from this process. Moreover, competitions should be held based on only one criterion - price. All other conditions must be taken into account when preparing for the competition. Moreover, it is proposed to introduce a 35 percent limit within the boundaries of one subject of the federation on the provision of land plots for construction for one affiliated group of persons. According to Igor Artemyev, the FAS has already submitted relevant proposals to the government.
Another “wild field” is the advertising market. The former head of the antimonopoly authorities, Ilya Yuzhanov, was never able to defeat the alcohol companies that have so far come up with a win-win move: advertising vodka under the guise of other drinks. The whole city is covered with similar billboard advertising. You look - a huge bottle of vodka, but if you look closely at the small signature - a low-alcohol cocktail. It's the same on television - either water instead of one of the most popular vodkas, or even pepper. Igor Artemyev promises to eliminate the gaps in legislation that allow alcohol producers to roam the advertising market so freely. The same applies to medications. As Mr. Artemyev reported, the FAS has already developed amendments to the legislation prohibiting the advertising of drugs that supposedly provide assistance, but have not been certified. Mikhail VOROBYEV |
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