Karelia OFAS finalized a case on a large medical cartel

Three companies are guilty of participating in a cartel at 94 auctions for supplying medical equipment, expendables and medications to the health care institutions in the Republic of Karelia

Karelia OFAS found that “Nicamed” Ltd. (St Petersburg), “Medlon” Ltd. (St Petersburg), “Medlon-DV” Ltd. (St Petersburg) took part in a bid-rigging cartel (Clause 2 Part 1 Article 11 of the Federal Law “On Protection of Competition”).

The case was opened upon analyzing documents and data provided by e-trading sites as well as materials obtained by the competition authority from the law enforcement bodies in Karelia.  

OFAS has established that “Nicamed” Ltd., “Medlon” Ltd., “Medlon-DV” Ltd. were repeatedly involved in cartels with different member composition at 94 open e-auctions in 2014-2016. The Governments ordering parties at the auctions for supplies of medical equipment, expendables and medications were more than 20 medical care institutions of the Republic of Karelia, the total sum of the initial contract prices was over 74.6 million RUB.

The objective of the violators was to maintain the price level at the auctions and gain the right for concluding government contracts at the maximum advantageous costs for them, imitating bona fide competition.

In the overwhelming majority of case, there was a minimum price reduction at the auctions – 0.5-2.5% of the initial auction price.

Commenting the decision on the case, Head of Karelia OFAS Artur Pryakhin stated:

“I’d like to point out efficient joint efforts on the case by the antimonopoly body and its colleagues from the law enforcement bodies  - the Investigation Department of the Investigation Committee of the Russian Federation in the Republic of Karelia and the Office of the Ministry of Interior in the Republic of Karelia for Economic Security and Anti-Corruption. The materials of criminal cases opened upon facts of bribery by top executives of the medical institutions for lobbying the interests of suppliers involved in public procurement, obtained by Karelia OFAS from the investigation bodies as part of interdepartmental cooperation - formalized considerably the evidence basis of the competition body in a case against participants of just another “medication” cartel. Under the burden of evidence the violators fully admitted exercising unlawful actions. It should be noted that OFAS continues investigating a number of cases on anticompetitive agreements, to a considerable extent initiated upon materials provided by the law enforcement bodies. No doubt, our effective inter-departmental cooperation will continue, bringing meaningful results”.

OFAS is also going to open administrative proceedings against the violators.