Moscow metro system infringed the rights of small and medium business

The conclusion was reached by Moscow OFAS upon considering a case on restricted competition at Moscow metro auctions

Individual entrepreneurs complained to the antimonopoly body regarding the actions of the “Moscow Metro System” State Unitary Enterprise organizing the auctions for the right to carry out trading activity in kiosks and pavilions located in subways at some metro stations.

In their opinion, the metro system fixed unreasonably large sums as auction security. For instance, the deposit was supposed to be 71.3 million RUB in the first auction and 77.6 million RUB in the second one with the monthly payments for trading in underground crossings – 5.942 million RUB and 6.468 million RUB accordingly.

Moscow OFASfound that “Moscow Metro System” violated Part 1 Article 17 of the Federal Law “On Protection of Competition” and issued a determination to stop violating the antimonopoly law and making amendments to the trading documentation.

Head of Moscow OFAS, Armen Khanyan, explained the decision made by the antimonopoly body: “The deposits fixed by Moscow metro are an insurmountable obstacle for most small and medium businesses. Such actions of the State Unitary Enterprise abruptly restrict the range of persons able to trade in underground crossings”.

He also pointed out that Moscow OFAS had already found “Moscow Metro System” guilty of a similar violation. At the time, only one entrepreneur was able to bid at the auction due to the unreasonable deposit requirement.

Part 1 Article 17 of the Federal Law “On Protection of Competition” prohibits actions in the course of tenders, quotations requests for goods, offer requests that lead or can lead to preventing, restricting or eliminating competition.