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Digital Economy – New Challenges, New Solutions

Experts of the IX St. Petersburg International Legal Forum discussed digital economy development, peculiarities which are faced by different states in the process of digitalization and ways to resolve related problems.

Sergey Puzyrevskiy, Deputy Head of Federal Antimonopoly Service of the Russian Federation, was moderating the session. Andrey Tsarikovskiy, State Secretary, Deputy Head of Russia's Federal Antimonopoly Service (FAS), Alexandre Barreto de Souza, President of Administrative Council for Economic Defense (CADE) of Brazil, Juliana Latifaj, President of Albanian Competition Authority, Thanner Theodor,  President of Federal Competition Authority of Austria, Aleksey Ivanov, Director of the HSE-Skolkovo Institute for Law and Development, Director of the BRICS Competition Law and Policy Center, Ioannis Lianos, Academic Director at HSE-Skolkovo Institute for Law and Development, Xianlin Wang, Professor at Shanghai Jiao Tong University, Caio Mario Da Silva Pereira Neto, Professor at FGV Law School, Sao Paulo, Bjoern Lundqvist, Associate Professor at Stockholm University, Leading Researcher of the Institute of Law and Development at the HSE-Skolkovo, Anna Numerova, Partner at Egorov Puginsky Afanasiev & Partners, Cristian Bolognini, Counsel at PHILIP MORRIS ITALIA S.r.l., and Svetlana Avdasheva, Professor at National Research University Higher School of Economics, took part in the discussion.

Opening the session moderator Sergey Puzyrevskiy defined main topics to be discussed. ‘Our goal is to have a look at the essence of modern digital economy and regulation tools we are to choose to provide efficient development of our economies in modern digital era, what is missed for these economies grow efficiently and how antimonopoly regulation is operating under new circumstances,’ he said.

Andrey Tsarikovskiy, State Secretary, Deputy Head of Russia's Federal Antimonopoly Service (FAS), opened his speech with a statement that competition law can become a response to the challenges of digital economy. These involve transformation of traditional markets and general globalization. ‘We have come to a conclusion that traditional tools of antimonopoly regulation often fail to work. New markets emerge and disappear faster than new antimonopoly mechanisms get involved. We understand that to a larger extent we have to write the new rules of the game,’ he said. Andrey Tsarikovskiy also expressed an opinion that universal rules of antimonopoly regulation are to be stipulated in the field of digital technologies. Common principals of competition law are the flexible regulation tool and the way to resolve regulation problems which is much needed by digital economy. ‘We possess an extremely flexible tool. Competition law may facilitate new players entering the market as well as open international cooperation,’  said  Andrey Tsarikovskiy.

Alexandre Barreto de Souza, President of Administrative Council for Economic Defense of Brazil, shared the experience of his country in the field of digital economy regulation. The main goals to be resolved are enforcement of antimonopoly policy in the countries which are primarily technology importers, internal coordination of digital markets regulation and international cooperation. ‘We are witnessing revolutionary times. Digital economy is already the case. It does exist in many markets and it exerts influence on these markets. Companies adapt to these realities, apply new systems, streamline their tools and that is why antimonopoly authorities are to adapt to that as well. That will facilitate their reaction to new challenges and efficiency from the standpoint of antimonopoly legislation,’ said Alexandre Barreto de Souza.

Thanner Theodor,  President of Federal Competition Authority of Austria, noted that the overall scope of problems is clear but no final solutions are in place. ‘We need a multilateral legally binding agreement to guarantee multifaceted competition in digital economy. Cross-boarder cooperation needs to be streamlined. Joint participation is needed in creating digital guidelines for antimonopoly agencies,’ said the speaker.

Juliana Latifaj, President of Albanian Competition Authority, shared Albanian experience in the field of digital economy development. ‘The government adopted digitalization strategy for a 5-year period. Legal framework was adopted to create environment appropriate for business communication, relative infrastructure growth, extended use of e-services by companies and individuals and e-government development,’ said Juliana Latifaj.

Xianlin Wang, Professor at Shanghai Jiao Tong University, spoke about digital economy and competition law in China. ‘In late 2018 Chinese digital economy accounted for 31,1 trillion  yuan, it amounts to 34,8% of Chinese GDP. Thus, digital sector has become a key driver of economic growth and job creation in China,’ he said.

Aleksey Ivanov, Director of the HSE-Skolkovo Institute for Law and Development, Director of the BRICS Competition Law and Policy Center, said that competition law as a regulating tool has a number of advantages in comparison to the current mechanisms of  preliminary regulation. ‘These advantages are a prerequisite for flexibility and orientation at principles, not at the rules of the competition law. If this peculiar trait is supplemented with a new type of control and supervision which is to be born inside Federal Antimonopoly Service we will get an absolutely new type of efficient influence on developing digital processes,’ said Mr. Ivanov.

Ioannis Lianos, Academic Director at HSE-Skolkovo Institute for Law and Development, spoke about specificity and possible ways of major digital platforms regulation, such as Apple, Amazon, Netflix, Intel, Google, Facebook and others.

Anna Numerova, Partner at Egorov Puginsky Afanasiev & Partners, thinks that now all goods and services providers are fighting for consumer’s time and attention and monetizing them. ‘According to some data, in the USA Facebook and Google have ‘seized’ 75% of consumers’ attention which is monetized via advertising. In the run of 20 years the cost of one minute has increased 20-fold,’ she noted.

Caio Mario Da Silva Pereira Neto, Professor at FGV Law School, Sao Paulo, named one of the challenges of digital economy. It is the search for balance by regulators and state to be able to implement control, on the one hand, and not to hinder development of innovations, on the other. ‘We all face the same situation. All of us do have more questions than answers at the moment. But while formulating challenges and difficulties we start thinking over their solution,’ said the scientist.

Cristian Bolognini, Counsel at PHILIP MORRIS ITALIA S.r.l., talked about several European court cases related to enforcement of antimonopoly legislation in the field of digital technologies. ‘I think that a lot of antimonopoly agencies have started to introduce amendments to their legislation. I think this trend will keep growing. We are moving towards antimonopoly legislation amendments to extend the sphere of application of such aspects as big data and personal data,’ he said.

St. Petersburg International Legal Forum is held on May 14-18th in the eastern wing of the General Staff Building of the State Hermitage. It is organized under the auspices of the President of the Russian Federation and the Ministry of Justice of the Russian Federation.