BRICS Antitrust Authorities Set Sights on Covantis

BRICS Competitive Agencies are set to develop a new approach on food markets regulation; One of the largest global blockchain platforms on commodities, Covantis, may be the first to fall under restrictions

BRICS antitrust authorities are developing a new approach to regulating food markets, with a focus on digitalization. The BRICS Competition Law and Policy Centre presented a new methodological approach at the 3rd BRICS + Digital Competition Forum, highlighting the need to analyze food markets in light of their accelerating digitalization.

One of the key targets of this new approach is Covantis, a blockchain platform that aims to digitize the entire agribusiness trade process. Founded by some of the largest agro-traders in the world, Covantis has already become a dominant player in grain trade, with 76% of Brazil’s grain exports going through the platform.

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However, Covantis’s dominance has raised concerns about market monopolization. The platform’s structure allows it to avoid antitrust scrutiny, while its collection of valuable commercial information from farmers and agricultural traders has raised concerns about unfair competition.

Covantis’s exclusionary behavior towards local players has also been criticized. The platform’s owners do not allow most local big players to enter the platform, making it an exclusive platform, a quasi-cartel.

The BRICS Competition Law and Policy Centre’s new approach aims to address these concerns by developing specific tools to regulate food markets and restrict the activities of monopolists like Covantis.

Alexey Ivanov, Director of the BRICS Competition Law and Policy Centre, emphasized the need for competitive agencies to take a new approach to regulating the food industry, one that takes into account the implications of digitalization.

The development of a derivatives market based on reliable exchange and OTC cash commodity prices is also expected to create opportunities for BRICS economies to manage risks and pool resources, leading to positive consequences for business and society.

Overall, the BRICS antitrust authorities’ new approach to regulating food markets is a significant step towards promoting fair competition and addressing the concerns surrounding Covantis’s dominance in the market.