Caterpillar voluntarily terminated violating the antimonopoly law
Following joint efforts of the Eurasian economic Commission, the Federal Antimonopoly Service, “Caterpillar” and its dealers, changes are made to international agreements on distribution in the EAEU.
On 29 July 2016, an extended session of Competition and Antimonopoly Regulation Sub-Committee, of the Consultative Committee on Competition, Antimonopoly Regulation and Public Procurement, of the Eurasian Economic Commission (EEC) chaired by a Member of EEC Collegium (Minister) on Competition and Antimonopoly Regulation, Nurlan Aldabrgenov, considered materials on elements of violating the antimonopoly law by “Caterpillar”.
According to “Eurasian group” (Kazkhstan), Caterpillar and its official dealers refused to supply products to the Kazakhstan market. The Committee on regulating natural monopolies and competition protection of the Ministry of national economy of the Republic of Kazakhstan forwarded materials to EEC for consideration.
Russian antimonopoly body took part in the investigation. From 24 December 2015 to 22 March FAS inspected distributors of Caterpillar products: “Zeppelin Rusland” Ltd., “Mantrak Vostok” Ltd., “Vostochnaya tekhnika” Ltd., and “Catepillar Eurasia” Ltd.
Dealers and “Caterpillar” reached agreements on fixing equipment sale for “Caterpillar” dealers and distributors by strictly determined territories of Russian market and EAEU common market. Distributors refuse to conclude contracts with companies located in the territories of other distributors. Breaching this rule is punishable by a “fine”.
Based on the wok with EEC and FAS, “Caterpillar” made changes to the international agreements regulating distribution in EAEU and changed Letters-Certificates on dealers’ catchment areas.
“Market division in accord with the geographic principle and prohibiting distributors to sell is a standard violation of the antimonopoly law. In the case of “Caterpillar” is has a cross-border nature”, commented Stats-Secretary, Deputy Head of FAS Andrey Tsarikovsky.
He was satisfied that “Caterpillar” voluntarily eliminated the violation and pointed out that it is a “bright example of a progressive method of “soft regulation”, adding that the regulator’s objective is to support economic growth across EAEU rather than punishment.