Информационный обзор практики Антимонопольного регулирования (1 июля - 15 августа, 2013)

news from the Federal Anti-monopoly Service

Strategy to Develop Competition and Anti-monopoly Regulation

On 3 July 2013, the Presidium of the Federal Anti-monopoly Service of the Russian Federation (the “FAS”) confirmed the final version of the Strategy to Develop Competition and Anti-monopoly Regulation in the Russian Federation for the period from 2013 to 2024 (the “Strategy”).

The Strategy is intended to prioritise the drafting of legislation and to optimise the operations of the anti-monopoly authorities, specifically to: establish advantageous institutions and organisations to protect and develop competition; reduce administrative barriers that limit the development of freely functioning markets; provide consumers non-discriminatory access to the services of natural monopolies, and establish efficient tariffs. The FAS also hopes that the Strategy will create conditions for effective competition when posting state and municipal orders and when auctioning off state property.

Class action lawsuits

On 1 July 2013, the FAS began developing the reform draft to introduce class action lawsuits. The reform is intended first and foremost to protect consumers, as well as small- and mid-sized businesses. Class action lawsuits simplify the concentration and coordination of the interests of those in a group that are filing a lawsuit from a violation of competition legislation. Additionally, specialised organisations are expected to be able to file lawsuits.

The Art De Lex Competition Law team is following this development closely. Watch for future client bulletins and news in future Competition Law newsletters.

Criminal liability for anti-competitive action

The FAS is preparing to expand the block of amendments to article 178 of the Criminal Code of the Russian Federation that will stipulate responsibility for prohibiting, limiting or eliminating competition. The FAS intends to make three additional important amendments in respect of applying article 178 of the Criminal Code. Specifically, these amendments envisage: 1) increasing the threshold amounts of damage and profit that will include criminal liability; 2) introducing rules under which initiating criminal proceedings will only be possible as per the material of an anti-monopoly check (under current legislation, an investigator may file criminal charges both prior to and after a commission of the FAS has conducted a check); and 3) eliminating article 178 on the abuse of a dominant market position.

Tougher administrative penalties

The FAS intends to make administrative penalties more severe for those business entities that present incorrect information on their profits, or that fail to present such information at all.

The FAS has drafted a block of amendments, under which article 19.8.3 of the Administrative Offences Code will stipulate administrative liability for either not presenting at all, or not presenting in a timely manner, or for presenting incorrect information necessary to calculate administrative fines to the FAS or it local agencies.

The FAS suspects a South Korean company of violating Russian law

According to recent reports in Russian media, not only has the Chinese-Hong Kong holding entity Pacific Andes taken part in dividing the fishery resources market of Russia’s Far East, but so has a South Korean company. According to Russia’s FAS, the practice of domestic fisheries has allowed foreign companies to enrich themselves using Russia’s biological water resources while avoiding the requirements of legislation on foreign investment.

The FAS concludes review in "Norwegian fish cartel" case.

On 8 July 2013, the FAS concluded its review of the case in respect of a cartel on the wholesale market to sell salmon and trout from Norway to Russia. Specifically, the FAS has ruled that the actions of the Fish Alliance Association, the Federal Service for Veterinary and Phytosanitary Supervision and a number of Russian companies were in violation of competition legislation.

in the Supreme Arbitration Court

Russian Railways decisions upheld

The Supreme Arbitration Court of the Russian Federation (the “SAC”) has upheld the legality and relevancy of the FAS decision that Russian Railways violated the ban on business entities coordinating their actions. On 11 July 2013, the SAC refused to review the petition of Russian Railways to overturn the FAS decision. Instead, the SAC upheld that Russian Railways had indeed violated article 11, section 1, paragraph 5 of the Law on the Protection of Competition.

The SAC also has given a final ruling on the dispute between Russian Railways and Petrotrans-Primorsk LLC. On 25 July 2013, the SAC refused to send to the Presidium the petition of Russian Railways; thereby upholding the legality and relevancy of the FAS decision citing Russian Railways for violating article 10, section 1, paragraphs 3, 9 of the Law on the Protection of Competition.

Pharmaceutical companies collusion decision upheld

On 15 July 2013, the SAC refused to send to the Presidium the petition of OJSC Pharmstandard to review the procedure of the judicial acts of the lower instances. Specifically, the SAC upheld the legality and relevancy of the decision and the instruction of the FAS arising from a finding that OJSC Pharmstandard had engaged in unlawful collusion.

in the State Duma

Lower minimum administrative fines for failure to present information to anti-monopoly authorities

The State Duma of the Russian Federation in its first reading has adopted the draft amendments to the Administrative Offences Code that would lower the minimum fine for not presenting information to the anti-monopoly authorities. Under this Draft, article 19.8, section 5 of the Code will be amended to lower the minimum administrative fine from RUB 300,000 to RUB 50,000. The Draft is intended to implement Decree No. 1-P of the Constitutional Court of the Russian Federation “On the matter concerning the checking of the constitutionality of article 19.8, section 5 of the Administrative Code in respect of the complaint filed by Maslyansky Grain Reception Centre” of 17 January 2013.