Wide Prospects and Ravines of Competition Policy

Abstract

The goals of competition policy have been a subject of debate almost since its inception. Competition agencies in developing countries are tasked with a wider range of goals than their counterparts in developed countries due to specific traits of the economic and institutional environment of the former. Goal complementarity, path-dependence, comparative efficiency of other government agencies and market characteristics specific to developing countries might make antitrust tools more effective and efficient in dealing with problems that are not strictly antitrust-related. However, no goals are 100% complementary, and can sometimes come into conflict. The mechanisms chosen to prioritize the goals can influence the outcome for competition as well as social and consumer welfare. Additionally, even if the goals are conventional, they can be misinterpreted in the course of implementing competition policy. The paper examines Russia’s recent National Plan for the Development of Competition in the Russian Federation for 2018-2020 and some of the goals postulated there to show how they correspond to the theory of industrial organization and the principles of law and economics. A similar analysis is done on the recent Report on regional development of competition in its section on cartels, which shows how the indicators chosen by the FAS Russia to evaluate its cartel policy can shift the emphasis of enforcement, lead to enforcement errors and distort the incentives of the authority itself as well as economic entities.