The European Antitrust Review 2015

Russia: Federal Antimonopoly Service

Igor Artemiev

Head of the Federal Antimonopoly Service

In 2013, a modern legal basis for competition based on constitutional provisions and advanced competition legislation was formed in Russia following the adoption of the Third Antimonopoly Package, the Roadmap on the Promotion and Improvement of Competition Policy, the elaboration of the Strategy of Promotion of Antimonopoly Regulation in the Russian Federation for 2013–2024, and the acceptance of active measures on competition advocacy.

At a meeting on 20 June 2013, the Competition Committee of the Organisation for Economic Co-operation and Development (OECD) provisionally concluded that the Russian Federation is willing and able to assume the obligations of OECD membership in the area of competition. The Committee formulated a number of recommendations for future action. At the time the recommendations were formally announced, some had reached the implementation stage (eg, amendments to the Federal Law of 28 December 2013 ‘On Protection of Competition’).

Following successful implementation of the ‘warning’ procedure, the grounds for their application and range of persons who may receive warnings were extended along with the list of infringements for which warnings could be issued.

We assume revocation of parts of the Competition Act that define business entities with a market share of less than 35 per cent as dominant except in cases of joint dominance and cases directly stipulated by the legislation of the Russian Federation.

For the purposes of establishing state and municipal undertakings, we are planning to set up a special rule granting preliminary approval from the competition authority for the creation of undertakings with more than a 50 per cent state share, and stipulate a liability for breaching such order.

The Federal Antimonopoly Service’s (FAS Russia) effective law enforcement has сhanged business practices in every economic sector, including:

  • oil industry – the development of exchange trade and benchmarking formula pricing has helped increase the volume of oil processing by oil companies by 19.6 per cent (oil companies begin to make profit based on turnover). Monopoly marginal cost was reduced to zero and oil companies increased the processing of 4th and 5th class oil products;
  • aviation – low-cost airlines have appeared on the market. There are three such airlines acting for internal flight routes in Russia, and consumer use has increased by up to 20 per cent compared with previous years;
  • telecommunications – implementation of the principle of ‘technological neutrality’ has made it possible to choose between GSM and LTE frequencies and ended ‘mobile slavery’;
  • pharmaceuticals – requirements were introduced for medicine prescriptions (they should be issued in accordance with established international description forms). The FAS made comparative research on medicine prices in the markets of Russia, the EU, the CIS and BRICS countries, and as a result, some of the largest international pharmaceutical companies reduced prices on strategically important medicines.

Amendments to a number of federal laws and statutory acts introduced by the FAS were aimed at competition development in the housing and utility sector as well as in the field of public health care and medicines procurement.

The Association of European Businesses, by the incentive of the FAS, set ou the code of conduct for auto producers, distributors, dealers, and service and trade organisations in the field of cars and the car parts trade. This code was adopted to avoid discrimination between market participants when selling cars and car parts.

In 2013, we continued to develop the antimonopoly regulation system of the Customs Union of the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation. It is important to note the work on the harmonisation of competition legislation of Customs Union countries: (the adoption of the Model law On Protection of Competition); the formation of a team for the consideration of antimonopoly cases in the framework of the Court of the Eurasian Economic Community; and the creation of an agreement on the protection of confidential information and liability for its disclosure while the Eurasian Commission exercises control over maintenance of the united competition rules.

The FAS’s priority for 2014 and subsequent years is to implement the best world practices. One of the priorities is international anti-cartel enforcement. It should be noted that the international anti-cartel investigative practice with the participation of foreign and domestic business entities has already been developed.

The FAS’s goal is also to increase the coordination and cooperation between competition authorities. Cooperation over international enforcement increases the effectiveness of competition authorities’ efforts in combating antitrust practices – such as in the 2013 case when the FAS discovered anti-competitive agreements and concerted actions in fish supplies from Norwegian and Vietnamese markets due to consultations with competition authorities of Norway and Vietnam.

Taking into consideration the globalisation of the world economy, competition authorities are facing more international cartels. As a result, finding the possibility of holding joint actions has become a matter of high priority (eg, carrying out joint inspections or inspections upon a request; exchanging confidential information and so on).

The FAS Russia is working on the elaboration of a draft Convention against Cartels and considering the possibility of creating an international organisation – an analogue to Interpol.

It is worth noting that currently in Russia, all the necessary conditions to overcome global economic challenges have been created. The necessary institutional system has been built up, as well as effective competition legislation and enforcement based on the best world practices (confirmed by the FAS’s position in GCR’s ‘Rating Enforcement’ survey and its ‘good’ grade).

Head of the Federal Antimonopoly Service

Next Chapter: Russia: Overview

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