Meeting of the BRICS Working Group for the Research of Competition Issues in Digital Markets Was Held in Kazan

Meeting of the BRICS Working Group for the Research of Competition Issues in Digital Markets Was Held in Kazan
Photo: 16.04.2024 1273

The meeting of the Working Group was held as part of the International Roundtable on “Antimonopoly Regulation in the Digital Economy,” organized jointly by the International BRICS Competition Law and Policy Centre and the Federal Antimonopoly Service (FAS) of Russia. This was the first meeting of the Working Group this year, opening the official calendar of antitrust events for 2024 under Russia's BRICS Chairmanship.

A report on BRICS digital platform markets was prepared within the Working Group with the support of the Brazilian antitrust authority CADE and experts from the BRICS Competition Law and Policy Centre in 2023, emphasized Andrey Tsyganov, Deputy Head of the FAS. In addition, a draft Model Principles and Standards for participants in the digital markets of  the BRICS countries has been developed. The document is planned to be submitted for approval by the heads of the BRICS competition authorities during Meeting of the BRICS Coordination Committee on Antimonopoly Policy to be held in July 2024 in Geneva.

It is impossible to discuss digital markets today without taking into account the impact of artificial intelligence (AI) technologies. The launch of ChatGPT and other Large Language Models (LLMs), as well as applications built on these technologies, have contributed to the formation of a huge growing AI market, said Alexey Ivanov, Director of the BRICS Centre.

"It's quite a competitive market in terms of structure right now. A lot of developers are stepping in and using open source tools to create their own products. But at the same time, as has happened with Internet markets in general, we are already seeing some signs of future monopolization."

At the same time, antimonopoly authorities have not yet developed an established understanding of how the market based on AI technologies is structured and what AI is as a product. Alexey Ivanov suggested that regulators join forces and conduct a joint study of the AI market within the BRICS framework. The initiative was welcomed by the Working Group participants and will be discussed in November at the BRICS+ Digital Competition Forum, which is organized annually by the BRICS Competition Centre, Brazil's FGV University Law School and CADE.

The session also focused on the use of soft law tools to increase self-regulation of industries and the balance between strict competition control and self-regulation.

Teresa Moreira, Head of the Competition and Consumer Policies Branch at the United Nations Conference on Trade and Development (UNCTAD), presented the results of a recent UNCTAD study examining current challenges for competition agencies in the digital economy. Speaking about soft law, she noted that its application was particularly relevant for developing countries interested in quick market stabilization measures.

"This is clearly a very important tool to address competition issues in digital markets right now. Especially for those who realize that making competition law changes might be too long bureaucratic process that distracts from the real goal, which is to address and to harness as much as possible the abusive power of digital platforms."

Mr. Ricardo Medeiros Castro, Assistant Economist at CADE (Brazil), provided an overview of the soft law tools that CADE applies. These include a number of guides — on transaction analysis, horizontal and non-horizontal merger screening, and compliance programs for companies. CADE also issued reports on machine learning and competition law, as well as on what agent-based modeling is and how these methodologies can be used by competition authorities.

Zhang Fan, Expert, Antimonopoly Department II, State Administration for Market Regulation of China (SAMR), spoke about the specifics of digital market regulation in China. The complexities and emerging competition issues in the digital economy have led to the increased use of soft law tools, such as guidelines calling for voluntary compliance by companies and clarifying the regulatory approaches of competition authorities.

Egypt is also actively resorting to the guideline format in regulating digital markets, emphasized Ms. Rowan Wael Aziz, Economic Researcher at ECA (Egypt). When drafting such documents, it is mandatory to collect the opinions of stakeholders and the general public. Other soft law tools in the ECA's arsenal include market studies in socially significant markets, fair competition advocacy programs and educational workshops at universities. 

“This is how we combine elements of soft law and basic enforcement. Since there is always a danger of over-regulation, we try to have an open door policy and promote self-regulation in every market. The ECA works to spread awareness of its activities and uses other means to disseminate competition culture in the Egyptian economy."

Model Principles and Standards for participants in the digital markets of the BRICS countries combine elements of "soft law" and strict regulation and will make it possible to harmoniously regulate even such complex markets as digital markets, Andrey Tsyganov noted at the end of the meeting. The antitrust authorities of India, South Africa and Egypt have already submitted their comments to the document, while Ethiopia agreed on the text without any additions.

The meeting of the Working Group, co-chaired by the antimonopoly authorities of Brazil and Russia, was held at the FAS Center for Education and Methodics in Kazan. The event was held in the BRICS+ format and was attended by representatives of the antimonopoly authorities of the CIS countries, as well as Zambia, Nigeria, Pakistan, Thailand, Tanzania and Zambia.

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