Expert analyze the key performance indicators of the Federal Antimonopoly Service of Russia

8 july 2016

The key performance indicators of the Russian Federal Antimonopoly Service are the topic of the new competition policy bulletin. Analytical Center experts used the antimonopoly service as an example of how state agencies and their employees can be encouraged to achieve state policy goals.

Analysis of regulatory documents has allowed the experts to identify 3 main groups of the key performance indicators for the Russian Federal Antimonopoly Service. Group 1 has to do with the number of violations of antitrust laws found by the FAS that businesses have eliminated and the number of FAS resolutions that have been fulfilled as a percentage of the total number of issued resolutions. Group 2 has to do with how often FAS resolutions get overturned by courts and group 3 is based on surveys of various market players about the activities of the FAS and the place of the services in various ratings.

Having looked at the various aspects of the Russian Federal Antimonopoly Service’s activities and having compared them with how foreign antitrust agencies operate, the experts note that the performance of the Russian Antimonopoly Service can only be assessed if the institutional, legal and political constraints are taken into account that the service has to operate under. In addition, in terms of the successful use of key performance indicators, the organizational structure of the Service is of paramount importance. It is vital that each unit has clearly defined priorities and functions and that each unit gets financed separately based on its goals, priorities and functions. However, experts admit that this approach is hard to implement in practice.

The analysis the experts carried out has led them to conclude that the Russian Federal Antimonopoly Service is leading the pack in terms of incentivizing its units: The Service uses a multilevel system of performance indicators for territorial directorates and for the central administration.

And yet there is room for improvement. There is a degree of overlap between some indicators while a number of indicators are the same as those used in other countries even though there are significant differences from the conditions that antitrust agencies operate under in those countries. But the most important conclusion the experts have drawn is that the majority of the performance indicators used by the FAS focus on current activities rather than on final results. “Speaking of final result indicators, it should be noted that the key performance indicators used by the antimonopoly service do not have any indicators reflecting the frequency and scope of use of economic analysis in the service’s work (as a means for helping the service decide whether it should get involved in specific antitrust cases), that would directly encourage employees to carry out such analysis,” the bulletin notes. At the same time, it could be argued that the frequency of FAS resolutions being overturned by Russian courts is an indicator that sort of promotes the use of economic analysis indirectly as to a large extend it reflects the quality of argumentation used in the cases brought by the FAS and the soundness of the grounds the cases are based on as compared to the quality of argumentation brought by companies that challenge FAS resolutions in court.

It would appear that this is an area that should be given priority when improving the key performance indicators for the Federal Antimonopoly Service, namely, contribution that the Service makes to the economic development in Russia should be made part and parcel of the set of the performance indicators it uses. For example, an indicator could be introduced that somehow measures the benefits enjoyed by consumers as a result of prevention or elimination of violations of antitrust law, experts advise.

The Analytical Center has held a Round-table on economic analysis for the application of antitrust regulations, during which the experts discussed the best ways to incentivize the antimonopoly service to carry out economic analysis, reviewed the requirements for such analysis as well as ways to optimize the key performance indicators for the antimonopoly service.

For more information see the bulletin Key Performance Indicators of the Russian Federal Antimonopoly Service

For other competition development bulletins see Publications.