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Economic Analysis: Theory and Practice
 

Anti-competitive behavior in the Russian business practices: motives of firms and consequences for the economy

Vol. 14, Iss. 14, APRIL 2015

PDF  Article PDF Version

Available online: 6 April 2015

Subject Heading: ANALYSIS OF COMPETITIVE ABILITY

JEL Classification: 

Pages: 25-34

Karagez'yan U.V. Volgograd State University, Volgograd, Russian Federation
karagezyan.ulyana@yandex.ru

Importance Currently, market relations in Russia are being accompanied by anti-competitive practices, rather than the development of the competitive environment. Numerous instances of competition restrictions identified by the antimonopoly authorities, on the one hand, and public applications to the Federal Service for Surveillance of Consumer Rights Protection and Human Wellbeing, on the other hand, indicate that anti-competitive behavior of firms becomes a common business practice. It induces the search for methods to prevent illegal and abusive business practices.
     Objectives The research is to analyze formats of anti-competitive behavior of the Russian firms in order to identify reasons and consequences of such behavior for the economy.
     Methods Relying on the empirical data of the Federal Antimonopoly Service and the Federal Service for Surveillance of Consumer Rights Protection and Human Wellbeing, the author reviews the behavioral models of firms, identifies the most prevailing anti-competitive practices, and determines the markets, which are mostly exposed to competition restraints.
     Results The prevailing format of the anti-competitive behavior in Russia refers to the abuse of a dominant position, informal interaction with authorities in order to secure unreasonable competitive advantages, refusal to provide consumers with requested information, sale of low quality goods. Whereas the Russian economics gets monopolized, market power is being concentrated, and information asymmetry exists among market actors, businesses mainly demonstrate the abusive and illegal behavior in the fuel and power, housing and utilities and other sectors.
     Conclusions and Relevance The author points out the intention to reduce the uncertainty of the economic environment and acquire unreasonable advantages as the main reasons for anti-competitive business practices, while qualifying the preservation of the monopolized structure of the market, growth in process, sale of low quality goods as consequences of anti-competitive behavior.

Keywords: anti-competitive practices, rent-seeking, limitation, abuse, dominance, monopoly pricing, violation, rights, consumer

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