In mid-February, the Federal Antimonopoly Service (FAS) proposed amendments to the law “On Protection of Competition“. Their essence is the removal of IT immunity to antimonopoly legislation. Part of the IT market immediately opposed the amendments. We are sorting it out.
How the law works now
According to RBC, now the results of intellectual activity are not subject to antitrust laws. Developers can deal with the price of their product in any way they want. Including setting a unique price tag for your software for each region or client. Or negotiate with other software manufacturers to whom not to sell it at all.
The FAS is dissatisfied with this:
Immunity creates unreasonable advantages for copyright holders who abuse their rights, to the detriment of the development of competition in the Russian commodity markets.
How the law will have to work
All changes relate to Article 11. According to them:
1) Software manufacturers are prohibited from entering into transactions with each other that imply:
- setting software prices at a certain level;
- software market division by territorial principle;
- termination of the use of the software;
- refusal to certain customers to use the software.
2) It is prohibited to agree on any regulation of the software market if such agreements:
- provide restrictions for the software manufacturer to independently set prices for software;
- they contain a ban on the acquisition of software rights from copyright holders who are competitors;
- they contain restrictions on the sale of software by the volume of sale or purchase, the composition of sellers or buyers;
- oblige the owner of the rights to the software to grant rights to third parties.
3) IT market leaders are prohibited:
- set or maintain a monopolistically high price for software;
- technologically or economically refuse to conclude a contract for the provision of software if there is a possibility of production or delivery of goods;
- impose on the counterparty the terms of the contract, unfavorable for him or not related to the subject of such a contract;
- it is economically or technologically unreasonable to reduce or stop the production of software if there is a demand for such a product or orders for its supply are placed if there is a possibility of its cost-effective production;
- create discriminatory conditions;
- create obstacles to access to the commodity market or exit from it to other IT companies.
How did IT companies react
The amendments were opposed:
- Association of Computer and Information Technology Enterprises (APKIT);
- Association of Software Developers (ARPP) “Domestic Software“;
- Russoft non-profit partnership.
They sent a joint letter to Maxim Shadaev, the Minister of Digital Development, Communications and Mass Media appointed only this January. The text of the letter is not publicly available. According to RBC, the amendments in the letter are called “a blow to domestic software“:
- the authors of the letter say that now market participants can choose any partners, and, they say, if the amendments are adopted, it will be illegal;
- the representative of 1C noted that “both the level and the speed of development of the digital economy will suffer“;
- the head of APKIT said that for developers, this will definitely entail a reduction in income and opportunities for investment in the development of new software;
- the CEO of the company “New Cloud Technologies“ even says that “the FAS is trying to restrict developers and actually imposes a ban on their activities.”
And what do we think?
The reaction of market participants to the amendments is not entirely clear. It seems that the bill is primarily aimed not at Russian market participants, but at Western companies operating in Russia, which, due to American sanctions, for example, periodically refuse to work with some users (first of all, we are talking about those who live in Crimea).
Now an independent anti-corruption examination of the edits is being carried out. The bill has not yet been discussed in the Government of the country.