Protection from Digital Cartels at Electronic Auctions

Abstract

Purpose: The purpose of the article is to determine the main legal remedies from “digital cartels” at electronic auctions, therefore, the specific features of cartel collusions in electronic auctions for state and municipal procurement as well as a mechanism to counter them are examined. Design/methodology/approach: the authors use dialectical, as well as comparative-law research methods. Findings: The article highlights that “digital cartels” as part of a larger-scale phenomenon of harmonizing market strategies threaten the competition, detects common situations of cartel collusion occurring at electronic auctions, the main approaches of government authorities on their detection and legal remedies against them, examines international experience in this area. The approaches of the antimonopoly authorities of Great Britain, Italy, and Russia are studied. Anonymity, complicated detection and usage of a digital environment for collusion requires new cartel-combating legal means. Such means may include toughening administrative and criminal liability, harmonizing antimonopoly law and law on the protection of information confidentiality. Antimonopoly authorities are transforming their operation techniques by using the latest technologies, means, and standards to detect and combat digital cartels. It is common to use software aimed at detecting cartels by digital footprints and a combination of indirect evidence of collusion. Uniqueness/value: the authors have revealed specific features of digital cartels, including anonymity, complicated detection, and usage of the digital environment for collusion. Also, they have determined legal means to suppress cartel collusions, as well as new standards of proving, including both direct and indirect evidence. It has been found that digital cartels are just one of the elements of anticompetitive behavior since digital means allow business agents to align not only their behavior at the electronic auction but also coordinate a market strategy in general.