'We understand that digitalisation brings benefits, but...'

'We understand that digitalisation brings benefits, but...'
Photo: Maksim Platonov

“The benefits we receive should not lead to an increase in prices”

Experts say that now the market power is shifting from real manufacturers to IT companies. And the real monopolies are digital platforms that determine the development and functioning of commodity markets. Therefore, the issues of legal regulation in this area come to the fore. This topic was discussed in Kazan at the conference “Digitalisation and Law” on 7 October. Read the details in the material of Realnoe Vremya.

“The event is dedicated to the issues of digitalisation of the economy. We encounter it every day. We understand that digitalisation brings benefits, because it gives new services, new opportunities. We can receive some goods and services remotely, and this, of course, is a big plus. You can get a huge amount of information via the Internet. But this benefit, at the same time, bears certain risks. Related to the possibility of monopolisation. That new factors of power appear, which can subsequently lead to restrictions, abuse, and the formation of new pricing policies. We need to see these processes in time. The benefits that we receive should not lead to globalisation and a change in the situation, price increases, the elimination of certain economic entities from the market," Artem Molchanov, the head of the legal department of the FAS, said at the plenary session.

Photo: fas.gov.ru
Artem Molchanov: “The benefits we receive should not lead to globalisation and a change in the situation, an increase in prices, the elimination of certain economic entities from the market”

Experts are unanimous that we are now in the process of the fourth industrial revolution. The share of e-commerce in the total turnover of retail trade is growing rapidly worldwide. For example, in the USA it increased from 16% in 2019 to 21% in 2020, in the UK — from 22% to 27,5%, in China — from 36,6% to 44,8%, and in Russia — from 6% to 11%.

However, according to Alexander Vasilyev, a member of the board of the Association of E-Commerce Companies, in 2021 there is a slowdown in the growth of e-commerce market, although it still continues. A key trend that has been observed since 2020 is a decrease in the share of cross-border trade in the overall e-commerce market in Russia. In 2021, people most often purchase digital appliances, furniture and household goods online.

“The market is very unconsolidated”

The expert considers that now the market power is shifting from real manufacturers to IT companies. And the real monopolies are digital platforms that determine the development and functioning of commodity markets.

“The market is very unconsolidated. Today, only three companies occupy 23% of the market. Compared to global indicators, this is a very unconsolidated market," Vasilyev said.

“IT companies are essentially becoming the infrastructure of the new economy," said Sergey Puzyrevsky, the deputy head of the FAS of Russia. “Because most of the transactions take place on these platforms. They have a lot of information that is not available to individual manufacturers, they aggregate it. And they make a profit by influencing those commodity markets that are interconnected with these real platforms. This is a reality that we feel, but so far from the point of view of legal regulation we do not cover.

Photo: fas.gov.ru
Sergey Puzyrevsky: “In fact, IT companies are becoming the infrastructure of the new economy”

It is not surprising that cases related to the activities of IT companies have become common in the field of antimonopoly regulation. For example, in France, there was a case when Google blocked contextual advertising, giving an advantage to its services. Booking company did not allow other services to provide lower prices than it did. In 2021, the largest companies Amazon, Apple, Facebook and Google for the first time simultaneously answered before the US Congress about the abuse of their position in the market. Experts suggest that now this trend is likely to intensify.

According to Vasilyev, the development of superapps can contribute to the fight against monopoly.

Experts hope that the Russian government will soon submit to the State Duma the fifth antimonopoly package, which for the first time introduces a definition of the dominance of a digital platform based on characteristic criteria.

Maria Korotkova
Tatarstan