ANDREY TENISHEV: IN THE ABSENCE OF COMPETITION SUFFERS THE MOST IMPORTANT–QUALITY OF SUPPLIED GOODS

In 2017 FAS opened 423 cases upon signs of breaching Article 11 of the Federal Law “On Protection of Competition”, 85% of which concerns bid-rigging. Head of FAS Anti-Cartel Department Andrey Tenishev gave this statistics at a seminar of Heads of FAS regional Offices from the Far East Federal District in Yakutia on 26 July 2018.

According to Andrey Tenishev, FAS exposes most cartels on construction markets (24.8%), health care (19%), transport and passenger carriage (9%), food products (8%), housing-and-utility services (6%).

“Last year the law enforcement bodies opened 9 criminal cases under Article 178 of the Criminal Code, in comparison with only three criminal cases in 2016”, said Andrey Tenishev.

Based on FAS data, annual public procurements reach 25 trillion RUB - around 30% GDP, of which mandatory in the electronic form: around 7 trillion RUB (under 44-FZ Federal Law) and nearly 2 trillion RUB (under 223- FZ Federal Law) – procurement from SME. The estimated harm from cartels reaches up to 1.5 – 2% GDP.

As informed by Head of FAS Anti-Cartel Department, in 2015-2018 there was a multiple increase of exposed bid-rigging incidents on the markets of supplying medicines and medical products.

“Medical cartels operate in 83 regions, the total initial (maximum) contract prices exceed 100 billion RUB. FAS revealed cartel elements in dozens thousands auctions”, shared statistics Andrey Tenishev.

Anticompetitive agreements cover practically all pharmaceutical groups of drugs and nearly all types of medical products.

FAS also observes that geography of anticompetitive agreements ion construction has been expanding in 2016 – 2018. For instance, anticompetitive agreements are exposed across 64 regions, cartel signs are revealed in more than hundreds of competitive procedures. Cartel income in this sector reaches hundreds of billions RUB.

Anticompetitive agreements in the course of auctions and contact signing are most widespread in:

• Construction and repair of social facilities (educational, medical, sport facilities, etc.)

• Road construction and repair

• Project estimates.

Andrey Tenishev also gave statistics on anticompetitive agreements in foods products supplies for the needs of government customers in 2016-2017.

Anticompetitive agreements were exposed in 18 regions. Cartel signs were revealed at over 400 open e-auctions. The total initial (maximum) contract prices exceeded 5.5 billion RUB.

FAS emphasizes high social danger of anticompetitive agreements in food products supplies since customers include educational facilities, including pre-school establishments, and medical facilities.

“In the absence of competition the most important suffers – the quality of the supplied goods”, thinks Andrey Tenishev.