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Standards of proof in the investigation of law infringement about competition in BRICS countries

Priority areas of development: economics, management
2019
Department: Laboratory of Competition and Antimonopoly Policy
The project has been carried out as part of the HSE Program of Fundamental Studies.

Goal of research

To explain the difference in the standards of evidence (proofs of infringements) under investigations of the restrictions of competition in BRICS countries.

Methodology

Analytical description of the motivation in the infringement decisions issued by competition authorities in BRICS countries. Comparison of quantitative thresholds of market shares necessary to make decision on collective dominance in different jurisdictions. Modelling of the effects of capacity constraints of the largest seller in the market on the incentives to collude (through the impact on threshold discounting factor) – in order to evaluate the quantitative criteria of collective dominance. Microeconomic analysis of comparative statics in platform markets on the number of competitors, taking  cross-platform network effects into account.

Empirical base of research

Texts of the decisions (infringements, acquittals) resulting from the investigations of the conducts of digital platforms in BRICS countries, texts of the decisions of the Russian commercial courts of the first instance on the claims to annul infringement decisions made by the Federal Antimonopoly Service, individual data on the judges in the Russian first instance commercial courts. 

Results of research

1) We demonstrate that the objectives of BRICS competition policy do not differ between the countries in the group as well between the BRICS group and mature jurisdictions. Different decisions on the similar conducts are explained by the different impact of the conduct on competition and consumer and total welfare within geographical markets of a particular country.

2) We explain the impact of the specific features of the economies of BRICS countries on the enforcement of competition law, especially towards digital platforms. Typical enforcement targets are global companies with the headquarters located outside BRICS. For these reasons BRICS competition authorities do not take into account positive impact of a particular conduct on the profit of digital platform as the evidence of efficiency. Because of that decisions of BRICS competition authority are often suspected in strong protectionist intends. The truth is that every BRICS competition system has it’s analogue among mature jurisdictions.

3) Analysis of the investigations and decisions towards allegedly anticompetitive conducts of digital platforms (Google, first of all), which were issued before competition authorities in mature jurisdictions issued their decisions, demonstrates that theories of harm comply with the modern law and economics of indirect (cross-platform) network effects.

4) We show that even if standards of evidence in the investigations of allegedly anticompetitive conducts in BRICS countries are lower than socially optimal standards, they do not underperform the standards of evidence that mature competition jurisdictions use, including those competition jurisdictions, which consider effect-based enforcement as a priority.

Level of implementation, recommendations on implementation or outcomes of the implementation of the results

Outcomes of the research are used for developing recommendations for improvement of the Russian competition legislation and guidelines for judciial review in the Russian commercial courts.

In additons, research project allows to develop recommendations to strengphen cooperation of competition authorities of BRICS countries under selection of tagets for competiion policy and antitrust enforcement.

Publications:


Avdasheva S. B., Korneeva D. V. Does Competition Enforcement Prevent Competitive Strategies of Digital Platforms: Evidence from BRICS // Russian Management Journal. 2019. Vol. 17. No. 4. P. 547-568. doi
Сидорова Е. Е. Оценка качества работы судей в контексте антимонопольного регулирования // Вопросы государственного и муниципального управления. 2019. № 3. С. 67-87. doi
Katsoulacos Y. On the choice of legal standards: a positive theory for comparative analysis // European Journal of Law and Economics. 2019. Vol. 48. No. 2. P. 125-165.