EEC Council determined special aspects of confirming Commission's competence for preventing competition violations in EAEU transboundary digital markets

At the meeting on July 15 in Vitebsk (the Republic of Belarus), the EEC Council has amended the Competition Assessment Methodology in terms of determining the special aspects of analyzing the state of competition in digital markets, as well as confirming the Commission's powers in such markets.

These amendments to the EAEU law resulted from the initiative put forth by the Russian side in October last year, following the consideration of which the EEC Council gave the corresponding instruction. The Russian side drew the Council's attention to the specific features in determining product and geographical boundaries, the volume and shares of economic entities operating in digital markets, as well as the necessity to confirm powers of the EEC to consider violations of competition rules in digital transboundary markets.

Experts from the "five" countries and the Commission have considered approaches to the analysis of digital and classical commodity markets, Eurasian and world practice of antitrust regulation and concluded that the analysis of digital markets is not significantly different from the approaches to the analysis of classical markets. As Arman Shakkaliev, the EEC Minister in charge of Competition and Antitrust Regulation noted, "each separate case may have its own specifics present only in this market."

To confirm the competence of the supranational antitrust regulator, in accordance with the amendments, the Commission will now analyze transboundary markets as part of the consideration of the application, followed by sending the draft opinion to the antitrust authorities of the EAEU Member States and consulting if necessary. Previously, such an analysis was carried out only at the investigation stage.

"Substantially, these procedures will ensure transparency in determining our competence for states," Arman Shakkaliev commented on the amendments.
Amendments made to the methodology also record certain special features of digital markets: services rendered at no charge and analysis of network effects.

For reference

Services rendered at no charge are widely used in digital markets to gain market power, and such services should be taken into account in market analysis. For example, the acquisition of a device with a pre-installed free package of services (browsers, marketplaces). At the same time, competitors offer a device similar in functionality, where similar applications must be paid additionally. It appears that services rendered at no charge affect the consumer's choice and should be taken into account in market research.

Network effect is the impact that one user of a product has in respect of its value for other users, including potential users. Network effects in market analysis may significantly affect both the determination of product and geographical boundaries of the market and serve as a barrier to market entry. For example, the more people use a certain social network, the more valuable and popular it becomes.