Experts suggesting assessing the economic impact of the FAS Russia

3 july 2017

The annual report of the Federal Anti-Monopoly Service (FAS) of Russia on the state of competition in Russia must include an assessment of the total economic impact of the FAS on the Russian economy, Analytical Center experts believe. The new competition development bulletin is dedicated to the assessment of the impact that the Federal Anti-Monopoly Service has on the economy. The analysts tried to come up with an assessment mechanism and test its applicability.

The experts believe the mission of the antitrust body is to prevent and curb restrictions on competition so assessing the economic impact of its efforts should focus not on analyzing the compensation of incurred losses but on estimating the losses consumers would have incurred if there had been no antitrust intervention. Nevertheless, the final assessment must include the court-verified losses that the offender must reimburse to the injured party, the specialists believe.

The bulletin tests the proposed approach only on part 1 of article 10 of the Competition Protection Law (abuse of a dominating market position), consisting of a fairly straightforward procedure for gauging the impact of antitrust interventions on the basis of how much customers lost due to increased prices resulting from antitrust law violations.

The experts believe that the FAS is in the best position to make this assessment. Charging the FAS with this task would also protect confidential information including specific figures which outside organizations would have difficulty getting accessed to. The FAS could group its cases on the basis of which subjekt of the Russian Federation they originate in or the type of violation and then estimate the effect for each specific group, publishing the results in aggregated form.

The specialists also believe this assessment must be made on an annual basis. Ex-post re-assessments of the effect of resolutions passed in previous periods would also be relevant. First of all, such reassessments would allow the FAS to more precisely (albeit at a later stage) gauge the impact of its efforts and, secondly, refine the ex-ante assessment methodology with regards to the basic assumptions made for further work.

For more see the bulletin Assessing the Effect of FAS Antitrust Interventions: Methodological approaches.

For other bulletins on competition development see Publications.

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