ARTEM MOLCHANOV: WE HAVE CREATED AN EFFICIENT TOOL OF ADMINISTRATIVE CONTROL

Head of FAS Legal Department discussed how to determine the size of damages from violations of the antimonopoly law

On 16 October, the Association of Antimonopoly Experts and Volga branch of Russian State University of Justice praised the Round Table on the “Problems of defining and recovering lost profit” in Nizhny Novgorod.

The participants looked at the pressing issues in this area.

Artem Molchanov pointed out that FAS focuses on violations significant for protecting and developing competition in general.

He described administrative mechanisms used by FAS in judicial proceedings.

“These tools should be used more actively in lawsuits on recovering lost profit. So far, the algorithms of civil law remedies for protecting those injured as a result of violating the antimonopoly law are applied exceptionally rarely in Russia”, commented Head of FAS Legal Department.

Among the underlying reasons, Artem Molchanov mentioned inequality of the contesting parties, complexity of proving the size of damages and lost profit inflicted as a result of violating the antimonopoly law, low efficiency of the existing procedural mechanisms of judicial protection and absence of clear and understandable methods for assessing damages.

He said that “recovering losses is an efficient tool of antimonopoly regulation in the experience of foreign countries. But there are also successful examples of recovery of damages in the Russian practice”.

As an example, Artem Molchanov quoted a ruling of Moscow Arbitration Court¹, according to which more than 1.1 billion RUB actual damages were recovered in the plaintiff’s favour.

The second example was a precedent – a ruling of the Court on Intellectual Rights², when the respondent was charged over 1.6 billion RUB of lost profit for unfair competition in the form of acquiring and use of a trade mark.

Head of FAS Legal Department reminded to the judicial and expert community: “We have created an efficient tool of administrative control from FAS, the antimonopoly law, Courts. At the same time, when we talk about violating the antimonopoly law, it also presumes infringing the rights of consumers ad economic entities. This is already civil law relations, where there are damages and lost profit as a result of either monopolistically high price or infringing rights, refusal to enter into contracts, use market power”.

“Here the same mechanism should be created that is not working in full swing yet. If this tool is used, we can form the second front to counter monopolism. This is the objective for developing the law and practice of discussing these issues”, added Molchanov.

References:

¹ The decision on № А40-46424/10 case of 12.07.2010 on recovering damages caused by violating Article 10 of the Federal Law “On Protection of Competition”

² Ruling on № А56-23056/2013 case of 12.10.2015