Dagestan OFAS fined “Dagestangazservice” Ltd. 10 million RUB for abusing market dominance

On 14th March 2014, the Office of the Federal Antimonopoly Service in the Republic of Dagestan (Dagestan OFAS Russia) imposed a turnover fine upon “Dagestangazservice” Ltd. for abusing market dominance. The company must pay over 10 million RUB as a fine to the federal budget.

Earlier the antimonopoly body received a petition from “ZhKKh Service” Ltd. (Kizilyurt) requesting to take measures against “Gazprom Mezhregiongaz Pyatigorsk” Ltd. that had unlawfully terminated gas supplies.

Dagestan OFAS Russia initiated a case against the gas company upon elements of violating Part 1 Article 10 of the Federal Law “On Protection of Competition”: economically and technologically unjustified termination of gas supplies to “ZhKKh Service” Ltd.

“Dagestangazservice” Ltd. was also brought into the case as a respondent since the company had terminated gas supplies to “ZhKKh Service” Ltd. following the instructions from “Gazprom Mezhregiongaz Pyatigorsk” Ltd.

Upon the case investigation, OFAS found that both companies violated the Federal Law “On Protection of Competition”.

OFAS also initiated an administrative case against “Dagestangazservice” Ltd. Having considered the administrative case, the antimonopoly body imposed a turnover fine upon the violator – 10.373 million RUB.

The Head of Dagestan OFAS Russia, Kurban Kubasaev, commented the situation: “A supplier can reduce or completely stop gas supplies to the buyers if the customer repeatedly breaches the deadline for the payment for the consumed gas or its transportation. The procedures however, must strictly comply with proceedings for terminating or restricting electric power and heating power supply to consumers that did not fully paid for the supplied fuel-and-energy resources, approved by a Decree of the Government of the Russian Federation. In the case in question, “Dagestangazservice” Ltd. breached the procedures and was punished by a turnover fine”.