“We can lose as society and civilization”: antitrust regulation amidst the pandemic

How should antitrust regulation be transformed in the age of the pandemic? What new challenges do antitrust agencies face and what new practices do both Russian and international regulators already apply? These and other questions were discussed by experts at St. Petersburg International Legal Forum 9 ½.

Opening the session devoted to the antitrust regulation in the conditions of the pandemic, the moderator, Deputy Head of the FAS Sergey Puzyrevskiy reminded about the measures already in place in the Russian antitrust law. Among them are cancellation of scheduled and reduction of unscheduled inspections, instalment payments for fines imposed for at least three months, and transition of antitrust agencies to remote servicing.

“The work of those commissions that cannot be stopped, for example, in the sphere of public procurement, is conducted via videoconferencing. And those issues that do not require a rush are postponed till calmer times”, stated the moderator.

Sergey Puzyrevskiy also noted that in areas where the current demand exceeds supply, conventional market mechanisms will not be able to restrain the growth of prices, so additional measures of price regulation by the state should be engaged.

“There are areas that are also characterized by a surge in demand, and there are enough goods to meet the needs of the population. Antitrust mechanisms must be already in place”, added Deputy Head of the Federal Antimonopoly Service of the Russian Federation.

The session also addressed the issue of natural monopolies. “It is always unpleasant to see situations with imposed disadvantageous conditions and services, refusal to conclude a contract, and overpricing, but amidst the pandemic it feels even stronger. That is why the application of antitrust mechanisms should be rather prompt and strict. At the same time many companies adequately assess the situation and try not to commit antitrust violations," said Sergey Puzyrevskiy.

The topic of natural monopolies was continued by Alexey Ivanov, Director HSE-Skolkovo Institute for Law and Development / BRICS Antimonopoly Centre. In his opinion, digital platforms form the new type of natural monopolies that replace the old ones. "Offline markets are shrinking, the online component is gaining strength. This requires us to apply a different methodological approach to digital giants. If we miss the moment when these giants become so influential that it is impossible to shift them from this position by any antitrust means, then we will probably lose both as society and civilization," predicted the expert. 

In his turn, Ioannis Lianos, President of the Hellenic Competition Commission, shared the experience of Greek competition services in the context of the pandemic. "In Greece we have taken innovative steps: we have engaged four thousand companies in an electronic survey and a serious set of data was received that was further analyzed. In such a way the oversight role of antitrust authorities is put forward," he said.

In addition, Ioannis Lianos stressed that, in the context of the pandemic, it was important to collect and process information, share experiences, pay attention to the emergence of cartels, and  fight overpricing, as well as to take into account the intermarket spillover of problems (e.g. increased demand for alcohol in an environment of medicine shortages). 

In conclusion, Ioannis Lianos also touched upon the increasing role of digital platforms in today's environment. "Digitalization will transform our society. The interaction after the pandemic will be different, and competition agencies will have to adapt to it," concluded the President of the Hellenic Competition Commission.

St. Petersburg International Legal Forum 9 ½: The Rule of Corona will be held online from April 10 to 12. Heads of Russian and international authorities, lawyers, researchers, politicians and journalists will take part in virtual discussions. The main topic of the forum is legal aspects of public and business life in the context of COVID-19 pandemic.