Antimonopoly committee of the Republic of Uzbekistan 10 место Di Digi gital eco tal econom nomy y and nd comp competit tition ion cha challenge llenges s in in the the Re Republi public c of of Uz Uzbe bekist kistan an
BRIEF INFO ABOUT UZBEKISTAN Are rea: : Territorial division 448 980 km 2 km 12 12 + 1 +1 + 1 +1 Population Capital 33 33.2 .2 Tas ashken kent mil illion ion GDP Nationalities 50.5 130 130 bill llion on USD 16 16 Urbanization ~5 ~52% religious confessions 2
Antim Ant imono onopoly poly com commi mitt ttee e of t of the he Re Republi public c of U of Uzb zbekist kistan an First antimonopoly agency was established as a Division of the Ministry of Finance on Antimonopoly In 1992 and Price Policy The Division was reorganized into the State С ommittee on Demonopolization and Competition In 1996 Development under the Ministry of Finance The Antimonopoly Committee was separated from the Ministry of Finance and became an In 2000 independent as State Committee for Competition The State Committee for Competition was reorganized and received additional authority for In 2005 reorganizing economically insufficient and unprofitable ventures The State Committee for Competition was reorganized once again by being merged with the State In 2012 Property Department Committee State Committee for Competition was reorganized and became as The State Committee of the In 201 7 Republic of Uzbekistan for assistance to privatized enterprises and development of competition The State Committee of the Republic of Uzbekistan for Promoting Privatized Enterprises and Development of Competition reorganized and divided into 3 independent State bodies: In 201 9 The Antimonopoly Committee, State-Owned Assets Management Agency and the Capital Markets Development Agency
THE HE AN ANTIMONO IMONOPOLY POLY COM OMMITTEE ITTEE at at a g a gla lance nce (Feb-Sep Sep 2019) 19) UIU 12
Sta State te sup suppo port rt for for di digi gital tal econ conom omy in in Uzb Uzbekist kistan an One Million Uzbek Coders “ Digital Uzbekistan 2030” state program (to be approved Q2 2020) IT park in Tashkent, 6 IT parks throughout the Republic to be built
“ Di Digi gital Uzb tal Uzbeki ekistan stan 2030 030 ” sta state te pr prog ogra ram 5. Freelance development 1. Chief Digital Officer In 3. Regulatory government sandboxes bodies creation 2. Innovation companies, start-up projects 4. Digital gaps support overcome and “last mile” development The program envisages a number of state support measures to digital development
Not Notabl ble e di digi gital econ tal economy omy re regul gulatio ation n in U in Uzb zbeki ekistan stan Law on competition President decree « Measures for (new version under approval in Parliament) Central bank activity improvement » Expected Q2. 2020 09.01.2018 President decree « Measures for Law on payments digital economy development » and payment systems 03.07.2018 19.09.2019 Law on electronic commerce 22.05.2015 65 existing documents in IT-communication sphere
Key ey de defini finitions tions in com in compe petitio tition n la law w on d on dig igital ital ma mark rket ets s Introduced in 2019, The definitions are in line with world practice but are new to Uzbekistan; Expanded network effect definition with focus on seller’ advantages Digital (multi-sided) market – the scope of circulation of goods sold by a business entity via the Internet, including digital platforms used to ensure interaction between two or more different, but interdependent suppliers, customers or other users in order to make profit for at least one of the parties Network effect – the increase in the value of goods in the digital market for one group of buyers or users or the change in the value of goods for this group of users with a decrease or increase in the number of users in another group, and, as a result, obtaining economic advantages for seller by collecting and processing user data with the possibility of maintaining its market share even in the absence of any actions on his part aimed at preventing the entry of competitors. Price algorithm - software for monitoring, calculating, setting and controlling prices for goods or for performing actions when participating in tenders, including auction (exchange) ones.
Reg egulation ulation of d of dig igit ital al ma mark rkets ets in the in the compe competi tition tion la law w The Committee has a broad mandate that applies across sectors, including all digital platforms (new version of Competition Law) Digital markets’ regulation is mentioned in key antitrust directions Dominant Prohibition of state position actions limiting Excessive and competition predatory Mergers pricing
E-com commer merce ce siz size e in Uz in Uzbe bekista kistan SHARE OF E-COMMERCE TO RETAIL 20% by 2015 50% by 2050 Internet E-commerce penetration transactions in level: 60% 2019: around 2 bln. USD (2% of GDP) MARKET POTENTIAL 2018 TO 2019 GROWTH 15 bln. USD by 2015 IT development BY 30% 50 bln. USD by 2050 index: 103 place out of 170 countries
Most ost vi visit sited ed na nati tional onal e-com comme merce rce pl platfo tforms rms in Uz in Uzbe bekista kistan Source: Association of e-commerce of Uzbekistan, 2019
Ke Key pay y payme ment nt sy syste stems ms in Uz in Uzbe bekis kistan tan • Two national players in processing and payments – Uz Card ( са . 80% share) and Humo • Several payment systems – Payme, Click, Paynet, etc. • Uz Card, Paynet – companies with the dominant position in the market • Co-badged cards available: UnionPay, VISA, Mastercard Two national payment processing systems share the market
Ke Key fore y foreig ign n di digi gital mar tal marke ket t pl player yers s in U in Uzb zbekis ekistan tan • Yandex rapidly expanding its Foreign digital companies presence expanding presence in Uzbekistan (April 18 – present 27 applications) March 19: Yandex metro, transport April 19: Yandex games February 19: Yandex taxi • Google share of pre-installed applications at mobile phones – 70%
Digit Di ital al ma mark rkets ts re regula ulatio tion n ch challe llenges nges in in Uz Uzbe bekistan istan Some regulation challenges are related to market development challenges 1 Digital marketplaces are often in grey area (est. 70% of total e-sales) Establishing clear antimonopoly 2 practices (e.g. product borders) in digital markets: we have to cooperate with the others Dealing with companies 3 hosted outside Uzbekistan: consumer rights are not always respected State support to digital platforms: accommodating to competition 4 rules required 5 Archaic legislation: data privacy, new concepts, IP rights in digital markets need to be articulated
Di Digi gital tal ma mark rketplaces tplaces in in Uzb Uzbekist kistan an Much of digital marketplaces difficult to regulate as they are in “grey zone” Privacy dimension is important but we need to establish clear regulations 70 % of e-commerce transactions Est 80% of such transactions happen through Instagram and happen through cash operations Telegram channels although there are deals approvals through electronic form Electronic commerce is an entrepreneurship activity on sales of goods, works and services carried out through information systems (Law on electronic commerce)
Ba Bala lance nce ne needed ded be betw tween een con consum sumer er ri righ ghts ts and nd di digi gital tal ma mark rket t pl playe yers rs se serv rvices ices Yandex does not have an office but has 30+ services in Uzbekistan; consumer rights could be compromised in case of taxi services • No call-center • Little consequences on Taxi drivers Taxi parks poor services • In case lost things Customers difficult to file a complaint “Google law” as of 01.01.2020 in Uzbekistan
Acc Accom ommo moda dating ting sta state te sup suppo port rt for for di digi gital pla tal platfo tforms rms to to fa fair ir com compe petit tition ion ru rule les Ensuring competition in payment and processing systems market • Unorthodox task for competition authority: ensure integration between the two competitor systems, ATMs are not connected • How do we set limits for international payment system involvement in Uzbekistan market? Unified republican National interbank (Salary payments, local currency transactions in processing center processing center Visa and Master card)
Acc Accom ommo moda dating ting sta state te sup suppo port rt for for di digi gital pla tal platfo tforms rms to to fa fair ir com compe petit tition ion ru rule les The desire to keep the pace of technological development and have a champion in the digital markets will have to be faced by competition authorities and have competition implications • We need to challenge their status, make sure they act in non-discriminatory manner, do not create market entry barriers and do not abuse their position • We need to think on how these companies can IMEI codes registration Product labeling change institutional environment so we have to think about digital ecosystems
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