Ex-Ante vs Ex-Post Regulation of Competition, Collusion in State Procurement, and Digital Transformation

Digitalization has also affected public municipal procurement, with companies increasingly introducing new technologies and artificial intelligence into their business processes. With the development of these technologies, digital tools are increasingly being used in anti-competitive agreements in tenders and commodity markets. <...> In the era of digitalization, the fight against cartels remains a priority; in order to curb illegal digital practices, we are digitally transforming the cartel detection process and working on the development of associated information systems. <...> A great deal of work is being done on competition advocacy and raising public awareness — Maksim Shaskolsky, Head, Federal Antimonopoly Service of the Russian Federation (FAS Russia).

Cooperation between competition authorities at the national and international levels implies information and knowledge exchange. We need to learn from each other to develop effective methods [of regulating monopoly activities. – Ed.] <...> This cooperation needs to extend more fully into the international era — Teresa Moreira, Head of the Competition and Consumer Policies Branch, United Nations Conference on Trade and Development (UNCTAD).

We can only have a unified legal framework in the relevant areas if this goes hand in hand with an effective institution of international adjudication represented by the EEU Court that fulfilling the objectives set by the statute of the Court and granted by member states — Erna Hayriyan, Chairman, Court of the Eurasian Economic Union.

We need new legislation, to strengthen the approach taken to effective regulation, and to create rules that would enable competition authorities to work in the digital market — Teresa Moreira, Head of the Competition and Consumer Policies Branch, United Nations Conference on Trade and Development (UNCTAD).

The development of model principles within the CIS inspires confidence — Mukhamed Khamukov, Deputy Head of Department for Interaction with Government Authorities, Ozon.

We very much welcome the dialogue within the Eurasian space to harmonize approaches using the experience of other countries. [We need – Ed.] the regulator and business to work closely, both at the national and international levels — Tadzio Schilling, Chief Executive Officer, Association of European Businesses (АЕВ).

Markets, known for their ... dynamic nature, create challenges for the authorities in identifying and addressing anti-competitive practices in markets. <...> This shows the need to review the existing arsenal of traditional tools and mechanisms used by competition authorities — Shushan Sargsyan, Member, Commission for Protection of Competition of the Republic of Armenia.

Today, antitrust regulation faces a big, really big and difficult choice, and the question is why resort to ex-post resolutions if it can be done ex-ante by simply not allowing violations. <...> The ex-ante approach primarily impacts fast-growing markets. In any such fast-growing market, it allows that market to degrade. <...> The ex-post method also has its drawbacks. When we use it, we give businesses unlimited freedom and the opportunity to develop in any direction, creating monopolies and regulating only what can be classified as a violation — Bakhyt Sultanov, Member of the Board (Minister) for Competition and Antimonopoly Regulation, Eurasian Economic Commission.

In my opinion, ex-ante regulation of the digital economy is mostly implemented outside the framework of antitrust regulation. There are a lot of problems in the digital economy that are solved ex-ante. They are related to, say, the distribution of certain content to different age categories. <...> It is good when ex-post regulation is combined with the possibility of soft regulation. Because the sector is new and the relations between the participants in the sector are in many ways not entirely clear, it should always be possible to remedy the situation without punishment or sanctions. <...> The ex-ante approach... is very time-consuming, long-term, and often the development of this sector itself is so rapid that the ex-ante approach becomes obsolete even before it is implemented — Aleksey Sushkevich, Director of the Department for Antitrust Regulation, Eurasian Economic Commission.

Our experience suggests that with regard to digital platforms, we can only apply ex-post now, but it is not that effective — Nurzhan Urankhaev, Head of Department of the Agency for Protection and Development of Competition of the Republic of Kazakhstan in the Almaty City.

The international antitrust community is now faced with trying to regulate something it does not fully understand. Antitrust authorities do not have specialised staff with adequate skills and knowledge to develop regulation [on the digital markets. – Ed.]. <...> Humankind is approaching the so-called technological singularity, when technology will be so advanced that people will not have time to learn these skills — Farrukh Karabaev, Deputy Chairman, Competition Promotion and Сonsumer Protection Committee of the Republic of Uzbekistan.

There is a very specific problem in the digital economy that does not exist in other sectors. <...> The digital economy is all about processing and collecting data using special algorithms. It just so happens that it is the biggest players in this digital economy that are busy processing and collecting data about themselves — Aleksey Sushkevich, Director of the Department for Antitrust Regulation, Eurasian Economic Commission.

There should be legislation that will require platforms to report on the algorithms they use, and algorithms should be open to the public — Kai Jia, Assistant professor, University of Electronic Science and Technology of China (USETC).

The issue we are discussing here is a critical issue for regulators because digital platforms are emerging and we have the opportunity to ascertain what exactly is happening. If there is a monopoly, it affects prices and causes problems. Products can be given away in exchange for data, and this is where we need to be mindful of personal data protection — Mary Gurure, Manager for Legal Services and Compliance of the Competition Commission, Competition Commission of the Common Market for Eastern and Southern Africa (COMESA).

In the field of competition regulation, countries are in a continuous conflict of interest: with the regulator on one side and the largest customer on the other, which would of course be very keen to align the state with their interests. <...> The state needs to set an example in this area [the regulation of digital markets. - Ed.], as perhaps in no other. <...> The digital signature presents a challenge and is a major, if not the only, obstacle to mutual trade and mutual recognition, and we need to resolve this as quickly as possible. After that, we will be able to enjoy all the benefits of digitalisation — Alexey Lavrov, Deputy Finance Minister of the Russian Federation.

Based on the current situation on the digital markets and their specific features, we can argue that antitrust regulation – both ex-ante and ex-post – should be aimed at reducing or eliminating barriers to market access, increasing the consumer’s freedom to switch to different services, and non-discriminatory access to the key services of digital ecosystems — Maksim Shaskolsky, Head, Federal Antimonopoly Service of the Russian Federation (FAS Russia).

Introducing too much regulation will inevitably lead to a reduction in the quality of services and competition. But if regulators "let things go" too much, it could lead to a monopolisation of digital markets. Therefore, the ex-ante and ex-post regulation models should be used in parallel to protect the interests of all players — Bakhyt Sultanov, Member of the Board (Minister) for Competition and Antimonopoly Regulation, Eurasian Economic Commission.

Introducing too much regulation will inevitably lead to a reduction in the quality of services and competition. But if regulators "let things go" too much, it could lead to a monopolisation of digital markets. Therefore, the ex-ante and ex-post regulation models should be used in parallel to protect the interests of all players — Nurzhan Urankhaev, Head of Department of the Agency for Protection and Development of Competition of the Republic of Kazakhstan in the Almaty City.

We do not believe that digital markets are fundamentally different from traditional markets. <...> The logical, legitimate desire of the state to be predictable, transparent and make the market stable for all parties implies the initial use of soft law instruments — Elena Zaeva, Head of Communications and Information Technology Regulation Department, Federal Antimonopoly Service of the Russian Federation (FAS Russia).