Monopoly and Regulation. Interaction Criteria

On the third day of the Gaidar Forum, the question was discussed if the third party intervention is appropriate in the relationship between the monopolist and monopsonist in a bilateral monopoly market. The panel was moderated by Andrey Shastitko, Director, the Center for Studies of Competition and Economic Regulation, RANEPA, and Andrey Tsyganov, Deputy Head of the Federal Antimonopoly Service.

Natalia Pavlova, Deputy Director, the Center for Research in Competition and Economic Regulation, RANEPA, talked about what a bilateral monopoly is, examined several cases and a reference to the concept of critical transactions, as well as the topic of “Critical transactions and their role in the reform of infrastructure industries”.

“The situation of a bilateral monopoly is a situation that is aggravated by the dominant position of two subjects; a situation when two subjects, negotiating with each other, have the opportunity thus to maintain civil-law relations and to talk with each other; however, they are not always able to keep negotiating with each other in the civility plane,” said Kirill Dozmarov, Lawyer, Head of the Antimonopoly Practice Group at Art de Lex. He also considered bilateral monopolies and regulatory approaches in a legal vacuum, described the anti-monopoly body as an observer and as a punisher, and a mediator.

At the end of his speech, he noted: “It is the civility of the negotiations, the possibility of a systemic concession to each other, the opportunity to bargain that was the essence of the function of the antimonopoly service.” In turn, Andrey Tsarikovskiy, State Secretary, Deputy Head of the Federal Antimonopoly Service, called public interest the extreme criterion, regardless of whether the case is subject to consideration by the antimonopoly body or not, and also focused on the task and principles of the antimonopoly body.

“The market power of the parties derives from the administrative resource,” said Deputy Head of the Federal Anti-Monopoly Service Andrey Tsyganov, who also spoke about mediation and gave examples of positive mediation.

“Business, as a rule, is not interested in the intervention of the regulator in relations with its counterparties,” said Maria Rozhnova, senior lawyer, head of the Antimonopoly and Commercial Law Directorate of Danone Russia. The speaker focused on the activities of the antimonopoly body and also spoke about the concept of collective domination of monopoly.

Nelli Galimkhanova, Head of the Industry Control Department of the Federal Antimonopoly Service, told how to analyze competition in the market if there is monopoly and monopsony.

The expert also notes: “It is necessary to determine more precisely how the analytical report should look and how to investigate the product boundaries of the market.” Nelli Galimkhanova separately discussed mediation.

In the final part of the discussion, the experts answered the relevant questions of the audience.

Elena Anikina

All records of live broadcasts from the Gaidar Forum 2019

10th Gaidar Forum Organizers:

The Russian Presidential Academy of National Economy and Public Administration (RANEPA);
The Gaidar Institute for Economic Policy (Gaidar Institute);
The Association of Innovative Regions of Russia (AIRR).

The general partners of the Gaidar Forum are Gazprom and Gazprombank; strategic partners include Prosveshcheniye publishing house, Coca-Cola, Pharmstandard group, ACIG Group of Companies, the Russian Textbook Corporation, SANOFI, Novartis, Johnson & Johnson, Russian Railways, MSD, and Mastercard; EY, Cisco and Russian Direct Investment Fund are partners. This discussion’s partners are Philips, Cherkizovo and RVC.

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