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  • Economic analysis of administrative enforcement of legal provision (on the example of antitrust): procedures of litigation initiating

Economic analysis of administrative enforcement of legal provision (on the example of antitrust): procedures of litigation initiating

Priority areas of development: economics
Department: Laboratory of Competition and Antimonopoly Policy
The project has been carried out as part of the HSE Program of Fundamental Studies.

The object of the research in 2015 included the  administrative procedures of antitrust legislation for important directions of enforcement   and the consequences of government intervention in the context of  1 type errors and 2 type errors.

The goal of the research is to present a report about main features   of  administrative procedures mainly of antitrust legislation   and  explain how  the procedural rules affect on the results of  antitrust enforcement.

Methodology. To fulfill this goal the research was made with the following methods of analysis:

1) an analytical review of  enforcement models  (inquisitorial vs adversarial), taking into account the features of Russian practice;

2) the original approaches were suggested to make the economic modeling of  Russian system of administrative law enforcement;

3) in the context of the described models of enforcement one of the key markets of the Russian economy - the oil industry - was analyzed.

4) price study of Russian oil companies accused in the abuse of a collective dominant position in the form of excessive price was conducted;

5) the role of regulator’s incentives, the impact of KPI (Key Performance Indicators) on the procedures for the application of antitrust laws and on the effectiveness of government intervention was analyzed;

6) the problem of antitrust intervention in highly concentrated markets with high levels of import protection and the economic model of optimal policy in such markets was analyzed;

7) effects of retail trade regulation (specifically of Russian law On trade) that emphasizes the goals of the support of target group, were analyzed. The empirical hypotheses on the effectiveness of the legislation introduced were tested.

Empirical base of research:

1) the analysis of main procedures in antitrust enforcement (including litigations) and their influence on the antitrust policy effectiveness;

2)  the sample of  3919 litigation cases considered by commercial courts of the Russian Federation during the period of 2008-2012. A sample is based on data, published on the official website of the Commercial Court of the Russian Federation. The study examined two types of violations, the abuse of a dominant position (art. 10 of the Federal Law ‘On protection of competition’) and competition restricting agreements (Article 11 of the Federal Law ‘On protection of competition’).

3) the subsample of litigation cases related to the companies of the oil sector in the context of legislation and procedures changes.

4) econometric study of the wholesale and retail prices on motor fuel in order to identify the type of strategic behavior of companies in the market.

5) the overview of systems of regulator’s incentives in different jurisdictions, the analysis of the impact of KPI (Key Performance Indicators) on antitrust policy effectiveness.

6) the overview of  empirical studies of contractual relationships with suppliers in the retail sector. Effects of the adoption and application of the Trade Act were estimated, taking into account costs and profits of suppliers and concentration indices in dependence of distributing facilities performance and role in the region.

Results of research:

• the main features of  Russian version of administrative law enforcement within inquisitorial model were articulated;

• a model that explains low incentives for companies to provide evidence in their favor, if the procedure of investigation and decision-making is organized according to inquisitorial model, was elaborated. An important role plays the fact that FAS has significant opportunities to modify claims after receiving data from the company.

• the example of the oil industry demonstrated that over the past ten years antitrust policy develops from the protection of competition to protection of the interests of specific target groups (buyers of oil and independent members of the retail market). It is shown that changes in the principles of cases selection confirm the elaborated model described above.

• it was shown that in antitrust policy in Russia consumer damage has become a basic principle of enforcement. The decisions against the Russian oil companies demonstrated that harm to consumer was used as the presumption of the restriction of competition. Simultaneously the econometric study did not confirm the existence of tacit collusion in the wholesale or retail oil market.

•  impact of specific performance measurement and motivation system on the development of Russian competition policy was explained.

• in highly concentrated markets it was shown that the imperfections of the institutional environment, even in the absence of explicit tariff and nontariff restrictions on import, maintain the market power of large domestic firms. In those circumstances, where supplies of raw materials and products of low level of processing are focused on sales on the world market, the lack of import competition supports  the third-degree price discrimination, with the reduce of social welfare. In these circumstances, special problems arise in the process of  merger approving.

• The analysis of the effects of the Law ‘On trade” showed that in the food processing industries there was no significant evidence of the positive impact on the position of suppliers ( in terms of profit or in accounts receivable). In this respect, the results correspond to the existing expertise and surveys of market participants. It is shown that in the assessment of contractual practices in the retail sector we should pay attention not only to distributive effects, but also to allocative effects, taking into account the total profits of suppliers and retailers.

Level of implementation, recommendations on implementation or outcomes of the implementation of Results. In this study the ways to improve the efficiency of procedures and norms of antitrust policy were suggested

Field of implementation. The results of this study can be used in the improvement of competition law and procedural rules of administrative enforcement.



Авдашева С. Б., Шаститко А. Е. Предмет обвинения: время объявления имеет значение // Экономическая политика. 2015. № 1. С. 72-91.
Shastitko A. Empirical assessment of the role of economic analysis in the Russian antitrust: why economic analysis is used // European Journal of Law and Economics. 2016
Avdasheva S. B., Golovanova S., Korneeva D. V. Distorting effects of competition authority’s performance measurement: the case of Russia // International Journal of Public Sector Management. 2016. Vol. 29. No. 3. P. 288-306. doi
Дзагурова Н. Б., Невидомская М. А. «Запаздывание» специфических инвестиций как временной аналог недоинвестирования // Журнал институциональных исследований. 2015. Т. 7. № 3. С. 76-91. doi
Шаститко А. А. Empirical assessment of the role of economic analysis in the Russian antitrust: Why is economic analysis used? // European Journal of Law and Economics. 2016. P. 1-18. doi