APPEAL COURT SUPPORTED FAS IN A CASE AGAINST A 20-MEMBER CARTEL
The total fines imposed upon manufacturers and suppliers of civilian gas masks exceeded 75 million RUB
The 9th Arbitration Appeal Court in Moscow reversed the ruling of the Court of First Instance and agreed with FAS arguments. Thus, the Court recognized the reasonableness of the conclusions reached by FAS Commission about a cartel on the market of civilian filtering gas masks.
Having investigated the case, FAS found that 20 economic entities violated Clause 2 Part 1 Article 11 of the Federal Law “On Protection of Competition” (concluding a prohibited agreement that would result in maintaining prices), and the cartel coordinator - Part 5 Article 11 of the Federal Law “On Protection of Competition”.
The cartel members “booked” particular auctions to exclude competition and conclude contracts with the lowest price reduction.
The cartel coordinator was responsible for observing the scheme. The coordinator obtained information from companies about participation in auctions and disseminated it among cartel members, who, in their turn, refused to participate in the auctions “booked” by other cartel members.
The Court of First Instance decided that written communication between cartel members and other evidence in the case insufficient to recognize that the respondents violated the Federal Law “On Protection of Competition”. Now all cartel members and the coordinator are held administratively liable; the total administrative fines exceeded 75 million RUB.
As Deputy Head of FAS Maxim Ovchinnikov mentioned earlier, FAS intend to intensify the efforts to held cartel members criminally liable.
“Cartelization in Russia is reaching a tragic scale. Every year 10-20 cases are opened at the federal level against cartels in Russia in public defence procurement. Companies and managers must understand that this is a serious offence that can break not only a career but even a human life. The “price” to be paid should be very significant to prevent new violations”, emphasized Maxim Ovchinnikov.