On November 14, within the framework of the IX International Scientific and Practical Conference “Antimonopoly Policy: Science, Practice, Education” organized jointly by the FAS and the BRICS Competition Centre, a regular meeting of the BRICS Working Group on Combating Cartels was held.
Cartels cause enormous damage to the economies of countries all over the world. The fight against cartels is one of the main areas of work of the FAS of Russia and antimonopoly authorities of the BRICS countries, emphasized the moderator of the meeting Oleg Dubkov, Deputy Head of the Anti-Cartel Department of the FAS. The leading sectors in terms of the number of agreements restricting competition in the Russian Federation are construction, road construction, as well as the supply of pharmaceuticals and medical devices. In the first half of 2024, FAS initiated 170 cases on cartels and other anticompetitive agreements.
One of the direct evidence of collusion is a confession of an agreement prohibited by antimonopoly legislation.
“After the introduction of amendments to Russian legislation and clear regulation of the procedure for filing such statements, we have seen an increase in their number in the cases under consideration,”
Deputy Head of the FAS said.
Klara Batanova, Deputy Head of the Anti-Cartel Department of the FAS, described the rules for the submission of confession statements about participation in a cartel. Following amendments to the Russian law “On the protection of competition”, such a statement may be filed until the court resolution is announced. According to the service, from 2021 to 2023, the number of confessions increased 12 times. At the same time, the main problem remains the synchronization of exemption from administrative and criminal liability.
“This issue requires joint work with law enforcement agencies and is particularly difficult in terms of compensation for damages or elimination of consequences caused by the implementation of the cartel agreement,”
Ms. Batanova stressed.
Nandan Kumar, Director (Economics) of the Competition Commission of India (CCI), provided an overview of the changes in Indian legislation designed to help fight cartels more effectively. The first change relates to the adoption of the Leniency program last year. Under the updated rules, an applicant who provides important information about the existence of a second cartel can qualify for a 30% penalty reduction for the first cartel. The second change is that all cartel participants, including those who were not directly involved in the same or similar trade in goods, are now liable for cartelization.
“These two changes will certainly enhance the effectiveness of cartel detection and anti-cartel enforcement activities in India,”
a CCI spokesperson said.
Combating monopoly agreements is one of the priority goals of China's State Administration for Market Regulation (SAMR). He Chizhi, Official of the Department I of Antimonopoly Enforcement, SAMR, highlighted the key areas of the agency's work in this track. First of all, it is antitrust enforcement in areas closely related to people's livelihood. Since 2023, SAMR has launched investigations into 26 cases of monopoly agreements and imposed administrative penalties in 21 cases with a total fine of RMB 303 million (approx. $41.8 million). The cases mainly involved horizontal monopoly agreement behaviors, and the industries included medicine, building materials, insurance, motor vehicle inspections, and etc. A total of 7 industry associations and 151 companies were punished. SAMR is also strengthening cooperation with other authorities and industry regulators and is working to move from ex post law enforcement to ex ante supervision.
“We use regulatory means such as reminders and interviews to resolve the risks of monopoly behaviors and restore the order of fair competition in the market. We have held administrative guidance meetings in key industries to guide enterprises to strengthen compliance management. We have conducted market competition status assessments and strengthened the monetary early warning and the prevention of monopoly risks.”
An experimental approach to anti-cartel legislation was the subject of a report delivered by Gian Marco Solas, Leading Expert of the BRICS Competition Law and Policy Centre. This approach involves the application of methods and laws of life sciences, as well as mathematical empirical methods in legal matters. Such an approach and all the tools provided by the extraterritoriality of competition law can be used to launch an initiative for litigation against one of the largest investment companies in the world — BlackRock, the amount of assets under management of which in October 2024 amounted to about $11.5 trillion. Formally, BlackRock is not a monopoly, but the growth of such institutional investors is a hidden threat to competition, experts say.
The issue of the negative impact of cartels on the poorest and most vulnerable groups in developing countries was raised by Teresa Moreira, Head of the Competition and Consumer Policies Branch, UNCTAD. Micro and small enterprises are also often more affected by cartels than large companies.
Despite efforts to combat cartels, including high fines and criminal penalties imposed by some jurisdictions, they continue to emerge on a daily basis. Moreover, research indicates that serial cartels are emerging. This means that competition authorities are only identifying the tip of the iceberg, and many cartels continue to operate for a long, long period of time.
“Antitrust authorities need to combine already existing investigative techniques with new approaches and tools in order to fight this phenomenon more effectively,”
Ms. Moreira emphasized. She also stressed it is vital to continue with a strong enforcement capacity to encourage cartelists to participate in leniency programs. In addition, there is a need to improve complaint mechanisms, complementing ongoing market studies, and to promote international and regional cooperation between competition authorities.
At the end of the meeting, Sung Kyoon Kim, Competition Expert, UNCTAD, presented new cartel detection tools used in Brazil (Cerebro program for detecting bid rigging), Colombia (public procurement data analyst Sherlock), South Korea (Bid-Rigging Indicator Analysis System, BRIAS) and other countries.
UNCTAD's Working Group on Cross-Border Cartels has been in place since 2020 to share information and best practices to promote cooperation among competition authorities. Another important tool is the Guiding Policies and Procedures under Section F of the UN Set (GPP, 2021).
The BRICS Working Group on Cartels was established in accordance with the Resolution of the Eighth United Nations Conference to Review the UN Set on Competition, in October 2020. The International BRICS Competition Law and Policy Centre provides methodological and expert assistance to the Working Group.
