COURT OF FIRST INSTANCE SUPPORTED KHABAROVSK OFAS IN A CASE ON COLLUSION

Khabarovsk Regional Arbitration Court agreed with OFAS arguments, recognizing legitimacy and reasonableness of its decision with regard to an oral agreement between Khabarovsk Regional Ministry of Health Care, “No.1 Regional Clinical Hospital” State Budgetary Health Care Facility, “Clean Planet” Ltd., “Novodez” Research-and-Production Association” JSC

Having investigated the case, Khabarovsk OFAS established that the purpose of the agreement was to ensure that the auction winner would be one of economic entities representing “Novodez” Research-and-Production Association” JSC by drafting auction documentation to fit the features of its products.

The case materials confirm the connection between actions of the defendants and subsequent adverse consequences such as restricting competition in the market of supplying disinfectants for the needs of 11 medical facilities in Khabarovsk in 2016.

Prior to official publications of auction documentations, producers for “Novodez” - “Clean Planet” Ltd. and “World without infections” Ltd. not only had access to its content and had in advance full information about the requirements for procurement bidders, but could also take part in drafting technical assignments, including there advantageous points that would make them the winners.

In view of the “blocking” points in technical assignments, other market players were losing interests to bidding or did not have a chance to take part in them as a consequence of the Agreement.

Head of FAS Anti-Cartel Department, Andrey Tenishev, emphasized: “The case is a classic example of collusion between the authorities and business, leading to competition restriction. In light of adopting theNational Competition Development Plan in Russia, we expect, first of all, that the authorities would move towards developing competition in their regions rather than restricting it”.