It's no secret that where there is demand, there is always a supply. If there are more than one company ready to meet the needs of consumers, then this indicates the presence of such a thing as competition on the market. With its help, prices, quality and quantity of goods are kept. If a company or organization offering a particular type of product or service to the population exists in a single copy, then the appearance of the so-called monopoly is likely (in Greek it means “one seller”).
The positive and negative aspects of the dominant company presence in the market
On the one hand, the presence of such a phenomenon has a beneficial effect on the development of the achievements of science and technology, allows the introduction of the latest technology, the infusion of funds into the training of skilled workers, etc. On the other hand, the monopolization of a particular sector of the economy has a number of negative aspects. So, the first and most important is the suppression of the driving force behind the development of market progress - competition.
The second factor follows smoothly from the previous one. The lack of competition allows you to set prices that are acceptable primarily for the enterprise. That is, there is a likelihood of an increase in the value of the goods with a decrease in the volume of its release. Monopoly firms can artificially slow down the development of new technologies, as well as ruin natural resources and pollute the environment.
Any attempt of a medium or small business of a similar nature to spin up and enter the market is eradicated. How, then, to deal with monopolies? How can one support the development of competition and prevent the emergence of solely leading firms in the market? To prevent all the negative consequences associated with the monopolization of the economy, in many countries of the world, including Russia, there is antitrust law. Let's take a closer look at what this area of ​​law is, where it came from and what its development is.
History of Origin
Antimonopoly legislation is a combination of various measures, the action of which is aimed at preventing, as well as limiting the formation and development of monopolies. The complex of these acts originated in the United States. The source of their appearance is the so-called Sherman's act, or "antitrust" law, signed in America in 1890. This document proclaimed unauthorized and criminally punishable any attempt to create a monopoly. In addition, this act introduced restrictions on the creation of unions (trusts), aimed at reducing competition. This law was the first brick in the foundation of a strong system called "Antitrust Law".
Responsibility for making decisions regarding various violations of the act rested with the government. That is, there was no special service monitoring the implementation of paragraphs of the document at that time. It is worth noting that there was also no system providing for the prevention of non-compliance with paragraphs of the contract. Gradually, the development of antitrust legislation was gaining momentum.
New additions and clarifications
All inaccuracies that occurred in the Sherman Act were corrected in 1914, when the Clayton Act and the law of the Trade Commission of the Federation of the States entered into force. They more clearly and clearly spelled out the basic definitions, control measures and responsibility for violation of the conditions. These documents formed the basis of the US antitrust policy.
Following America, other states have taken measures to increase competition. In 1948, a law on monopolies was proclaimed in Britain. Then, in 1963, the antitrust act was signed in France. A year later, in Italy. Eastern Europe joined the fight against monopolies in the 80s of the last century. Among the countries that supported the process of eradicating trust unions was Russia.
It is noteworthy that each country has its own priority areas of economic development that this law supports: the antitrust laws of both the United States of America and Europe, although it came from one document, protects the interests of various spheres.
The American model is aimed at counteracting the emergence of trusts as an independent entity. European politics is characterized by a regulatory mechanism that allows it to deal with negative phenomena in emerging monopolies.
Artificially created dominant organizations and attempts to combat them
It is noteworthy that in Russia monopolies began to appear with the blessing and on the orders of the ruling elite. The state independently created alliances and trusts, but only in those sectors of the economy whose development was a priority for the growth of the welfare of the whole country. These include the following: transport, oil and coal industries, metallurgy, etc. However, artificially created trusts gradually began to oppress other enterprises and dictate their own conditions to the government. That is why state authorities have decided to introduce antitrust laws into the economy. This happened in 1908. The basis was taken already known act of Sherman. However, the first attempt to create an antitrust policy failed. The created associations of businessmen contributed a lot to this. Soon, government agencies were occupied with more significant problems: the First World War and the October Revolution threatened the existence of the whole country.
After some time, the USSR government created its own monopoly under the name "command economy." There was no competition. And who would dare to compete with such giants as Gosplan, Gossnab and Goskomtsen?
"Great-grandfather" FAS
Shortly before the collapse of the USSR, in 1990, at the government level, the State Committee of the Russian Soviet Federative Socialist Republic was established on antitrust policy and supporting the development of new economic structures. This entity is the progenitor of a unit such as the Federal Antimonopoly Service (FAS). The prerequisite for the appearance of the committee was the approval of the law of the RSFSR "On Republican Ministries and State Committees of the Country." Since then, the development of antitrust structures in the country has begun to gain momentum.
The very next, in 1991, the government passed a law that regulated competition and limited the activities of trusts and various unions in the commodity markets. The decision was amended and supplemented after four years. In the end result, this law prohibited any actions of an organization occupying a privileged position in the market if they entailed:
1. Infringement or harassment of the interests of other participants in the trade.
2. Restriction of explicit or implicit competition.
In addition, this regulation prohibited any contracts regarding pricing, sharing a market niche, or seizing goods that entailed a shortage.
Two years later, in 1997, the State Committee of the Russian Soviet Federative Socialist Republic on antitrust policy and support for the development of new economic structures was renamed the State Antimonopoly Committee. Over the years, this unit has undergone numerous changes. In 2004, the Federal Antimonopoly Service that has survived to this day was created on its basis .
Organization Functions and Tasks
This department is directly subordinate to the chairman of the government. If taken together, the Federal Antimonopoly Service is involved in resolving issues that are somehow related to the emergence and development of monopolies. In particular, this unit:
1. Solves issues related to unfair competition.
2. Engaged in the suppression, as well as limitation and prevention of actions entailing the emergence of monopolies.
3. Monitors compliance with all requirements and regulations regarding antitrust laws.
All organizations operating in the Russian market, whose sales account for more than 35% of the total in the country, are listed in a special state register. This list allows the FAS to exercise proper control over the activities of monopolies and hold them responsible for violating antitrust laws.
The service under consideration is developing new proposals for improving the development of a competitive economy. It also differentiates the use of these measures depending on the market sphere.
Various interpretations
Currently, steps are being taken in Russia to create a full-fledged competitive environment for the national economy. They provide for the promotion of goods on the world market, reducing the risk of the emergence of trusts or unions in a particular market niche. At this stage of development, the antimonopoly legislation of the Russian Federation is far from perfect. Numerous pitfalls of existing decrees and different interpretations of their points lead to negative consequences, the responsibility for which lies with the government and businessmen. Even the smallest violation of antitrust laws can result in serious damage.
Federal Laws to Know: Part One
He who is warned is armed. That is why large organizations should know the rules and laws that federal antitrust laws contain.
There are two main areas in which the regulation of organizations. The first branch includes antitrust legislation, the provisions of which are directed against the dominant company and artificially created pricing by it. This direction is regulated by the following decrees:
1. Federal Law “On Competition and the Limitation of Monopolistic Activities in Commodity Markets”. This act entered into force on March 22, 1991. It is the main document by which control over monopolistic organizations is exercised.
2. Federal Law “On the Protection of Competition in the Financial Services Market”. It was adopted on the twenty-third of June 1999.
Federal Laws to Know: Part Two
The next branch that antitrust laws affect in Russia is the regulation of the work processes of natural monopolies. The latter include the railway and water supply, housing and communal services and other strategically important organizations. The functioning of such objects is based on several legal acts:
1. Federal Law "On Natural Monopolies". It was adopted in mid-July 1995 by the State Duma. And it came into force a little later - on August 17. Then he was repeatedly subjected to adjustments and additions.
2. Decree of the President of the Russian Federation “On Housing and Communal Services Reform” adopted on April 28, 1997.
3. On December 20, 1997, a decree of the Government of the Russian Federation “On the Program for the Demonopolization and Development of Competition in the Housing and Communal Services Market for 1998-1999” was signed.
4. Federal antitrust laws are also governed by a presidential decree “On the Development of Competition in the Provision of Services for the Maintenance and Repair of State and Municipal Housing Funds,” which entered into force at the end of March 1996.
It is worth noting that the first and second directions are strictly implemented at the regional level. Local antitrust laws in the field do not differ fundamentally from the general situation that applies throughout the country. The adoption of additional acts at the regional level only testifies to the desire of the executive bodies to give federal decisions a legitimate character in some separate areas of the state.
Particular attention should be paid to the fact that the antimonopoly legislation has a number of restrictions that hamper the freedom of decision-making by various business entities. And, most interestingly, it has a unique, in comparison with other Russian legal systems, very abstract structure. The latter, in turn, consists of a series of abstract concepts.
Description of the main act
On March 22, 1995, the government of the RSFSR adopted the law “On Competition and the Limitation of Monopolistic Activities in Commodity Markets”. For several decades, this act was supplemented and revised. In the future, the articles of the document began to determine the basic principle of the mechanism called “Antitrust Law”.
Initially, the decision consisted of seven sections. Gradually, some of them were replaced by separate laws, while others simply lost their force. However, this document is the main one in the formation of the antitrust policy of Russia.
Briefly consider what each section of this act contains:
1. The first part of the law is called “General Provisions”. It consists of four articles that narrate about / about:
a) the objectives pursued by this decision, and on such a mechanism as antitrust laws, as well as its structure;
b) the scope of the law itself;
c) antitrust authorities of the federal and regional scale;
d) the basic concepts that are found in the text of the document.
2. The second section is the main and most important for organizations. It describes the nature, and also gives possible signs of the presence on the market of a company conducting a monopoly activity. Articles 5–9 regulate the work of organizations that occupy a dominant position in a particular area of ​​the economy.
3. The third section of the law, which consists of one article, talks about such concepts as unfair competition and antitrust laws as a means of combating it.
4. The fourth part of the law consists of six sections. Each of them in turn gives answers to the following questions:
a) what are the tasks and functions of the antitrust authority;
b) what his powers include;
c) what are the rights of the body in obtaining information of various kinds;
d) whether it is necessary to provide data to higher authorities;
e) that include the duties of the antimonopoly authority in respect of trade secrets;
e) what is the assistance of authorities in the development of entrepreneurship and competition.
5. The fifth section reveals to the reader various types of state control over monopolistic enterprises. It contains four parts.
6. The following describes liability for violation of antitrust laws. Consisting of six parts, this section gives a complete and comprehensive concept of o / v:
a) the mandatory execution of instructions and orders issued by the antimonopoly authority;
b) types of liability for violation of antitrust laws;
c) the obligations of commercial and non-commercial enterprises in case of failure to comply with paragraphs of the act in question;
d) liability for violation of the law by managers and other persons;
e) recovery of losses;
f) the liability of persons of the federal antimonopoly body in case of violation of clauses of the law.
7. The last section establishes the procedure for the adoption, execution or appeal of orders issued by the antimonopoly authority.
This is the structure of the original law governing the activities of dominant organizations. Gradually, many articles of this document became separate full-fledged acts.
Methodology for checking violations of antitrust laws
It is noteworthy that for the most part this law does not prohibit the action itself, but the effect that may appear after it. It is this fact that entails enormous difficulties not only for business entities, but also for other individuals and organizations.
The main difficulty arises when determining the list of actions that can lead to various negative consequences affecting antitrust laws and regulation of business processes. If you understand that certain moments will lead to a violation of the legal act, then you can safely plan the development of the organization and assess the economic risks. In another case, there is simply no possibility for a normal work process.
As a rule, in order to find out the negative effect of certain actions taken by the organization, it is necessary to conduct a deep economic analysis. There is no single methodology for verification. Cases of violation of antitrust laws are checked on the basis of normative act No. 220, which is called as follows: “Procedure for analyzing the state of competition in the goods market”. This decision was approved on April 28, 2010 by order of the FAS of the Russian Federation.