Marketplaces will have their shares limited – Kommersant FM

Russian authorities have decided to slow down the growth of the largest marketplaces. As Kommersant FM found out, the Federation Council has developed a bill that significantly limits the owners of online platforms that occupy more than a quarter of the market in the country. The document assumes that they will not be able to open new logistics infrastructure facilities, including order delivery points, or acquire shares in any companies, regardless of their form of ownership. Transactions made in violation of such requirements will be considered void, and the owner of the marketplace will be punished with a fine. The size of the latter will be determined by the Federal Antimonopoly Service.

Online retailers have managed to occupy a significant share in Russian trade, but their activities have not yet been regulated by law, the author of the initiative, head of the Federation Council Committee on Economic Policy, Andrei Kutepov, said in an interview with Kommersant FM:

“Everything is adopted in accordance with the current law on trading activities, where the maximum market share for trading participants is quite clearly established, and its effect applies to the entire country. This will not stop development. Due to the fact that marketplaces are gaining momentum and are firmly integrated into the economy, there is an urgent need to regulate a number of issues legislatively. Moreover, every year the increase in turnover is quite significant; this year we expect a turnover of up to 7 trillion rubles.

In addition, it is necessary to integrate this sector into competition legislation. In general, everything is spelled out quite clearly in the law on trading activities, and the same will happen here. This will not affect users in any way. As for partners, there must be competition in our country.”

But what can such rules lead to? Independent expert on retail innovation Boris Agatov does not rule out that owners of large marketplaces will have to significantly reconsider their approaches to business:

“Imagine that the locomotive accelerated to 300-500 km/h, and suddenly someone suddenly pulled the stop valve. The two largest players, Ozon and Wildberries, whose share is already far beyond 25% in Russia, will find themselves in this situation.

They have a fairly large program for the development of distribution centers and the opening of order pick-up points. All this will have to suddenly stop. But this is extensive growth, because the market as a whole is growing, and people come there because there is nowhere else to come.

Apparently, Wildberries guessed about this situation, because just recently they announced that they were moving in the direction of development – they would now build warehouses not for themselves, but for others. Most likely, they can reorient their business simply to developing infrastructure, which will be very suitable for online.”

If the authorities approve restrictions for owners of large marketplaces, this will hit not only the online platforms themselves, but also their partners and users, says Ekaterina Smirnova, partner at the consulting bureau D&A Partners: “Firstly, the marketplace can continue to sell the same volume of goods, only now consumers will have to receive them in locations that are inconvenient for them. Secondly, small and medium-sized businesses gain access to an unlimited number of buyers through marketplaces.

Now imagine that these online platforms have 250 thousand instead of 1 million order pick-up points. And these pickup points, of course, are already occupied. Who will be denied access to the marketplace? Small and medium businesses. There are quite a lot of players on the market, they understand that they will grow a little more and will find themselves in a zone where their number of delivery points is sharply reduced.

The antimonopoly authority interferes with your contractual and pricing policies. With such introductions, the incentive to grow and compete will be simply minimal.”

Earlier, the Federal Antimonopoly Service reported that Wildberries and Ozon together occupy approximately 80% of the marketplace market. However, such a dominant position is not yet a violation, the department clarified. Representatives of large marketplaces have not yet responded to the senators’ initiative, with the exception of Yandex Market. They declined to comment.

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Vladimir Rasulov