It is not good idea to block web-sites for violation of antitrust law

The Russian ministry of economy is of such opinion. Russian Federal Antitrust Service has proposed to restrict access to web-site or take down mobile app for violation of antitrust law. It would be a new type of administrative punishment under Russian administrative law. Under proposal restriction of access or blocking of app would last up to 90 days. The Russian ministry of economy has assessed the draft law and its implications.

Under the draft law the new punishment can be of the primary as well as secondary character. After analyse of draft law the ministry concluded that the administrative punishment de facto entail the suspension of business activity for long term. But the similar type of punishment (temporarily suspension of business activity) is already provided in current Russian administrative law. Therefore the proposed type of administrative punishment would directly compete with other – effective – administrative punishment.

Therefore the proposed type of administrative punishment is not necessary. It is worth to bear in mind that IT companies provide different services under one brand and on one resource or platform – online taxi, air ticket sales, online market places etc., and in case of applying proposed administrative punishment all services can be blocked even if the blocking followed due to violation of antitrust law by one of the services. In other words the draft law does not take into account proportionality when the sanctions are applied.

The ministry also mentioned that the introduction of new sanctions could lead to “corruptive risks” and abuses from the side of supervising authorities. The implementation of new sanctions would necessary increase workload of Russian judicial system. The price setting algorithm should be considered as technical instrument, but not as qualifying feature. If the subject of regulation merely applies price setting algorithm it is not necessary a violation of antitrust law unless it is aimed at the circumventions of prohibitions provided in current Russian law. And if the subject of regulation violates the law by the applying the price setting mechanism, it should be considered as the means of violation.

As a result the ministry believes the legislative proposal by the Federal Antitrust Services lacks adequate justification for the provisions of draft law. The draft law consists of excessive obligations, prohibitions and restrictions for natural and legal persons in the field of business and other economic activity. The draft law also contains provisions causing increase of expenditures for business enterprises as well as for state budget.