DMITRY ARTYUSHENKO DISCUSSED THE BEST JUDICIAL PRACTICE OF THE YEAR
Cassation Court supported FAS position on an exhaustive list of immunities regarding an anticompetitive agreement under Article 11 of the Federal Law “On Protection of Competition”
Deputy Head of FAS Anti-Cartel Department, Dmitry Artyushenko was a speaker at e Conference – the “Best Judicial Practices – 2018” organized by the “Vedomosti” and “Vedomosti. Practice” newspapers.
He said that in 2017 Pskov OFAS found that “Novamed” Ltd. and “PskovMedResource” Ltd. breached Clause 2 Part 1 Article 11of the Federal Law “On Protection of Competition”: companies concluded a cartel to maintain prices during 30open electronic auctions.
The companies appealed the decision of the antimonopoly body. Court of the First Instance and the Appeal Court supported the claimants with a motivation that the companies had formed a “subsidiary” group of persons since they entered into a contract between themselves on offering managerial, administrative and other services (Part 7 Article 11of the Federal Law “On Protection of Competition”). The Courts classified the contract conditions as a “broad range of economic activities of “PskovMedResource” Ltd., of covered by instructions from “Novamed” Ltd., including participation in public procurement”. Thus, Courts concluded that one company exercised control over another and, as a consequence, FAS unlawfully accused the companies of violating Clause 2 Part 1 Article 11of the Federal Law “On Protection of Competition”.
Evaluating the rulings of the Courts of lower instance, the Arbitration Court of the North West District stated that extended interpretation of the control concept, formalized in Part 8 Article 11of the Federal Law “On Protection of Competition” is unacceptable.
As the Cassation Court pointed out, the contract cannot indicate that “Novamed” Ltd. exercised the functions of an executive body for “PskovMedResource” Ltd., i.e., be a document certifying control. Moreover, the Court classified the contact as an additional evidence of collusion between “Novamed” Ltd. and “PskovMedResource” Ltd.
“The list of immunities under the ban of anticompetitive agreements is a close one. FAS does not consider various contract – on services, trust or otherwise – as the grounds for a company establishing control over another and, as a consequence, the grounds to relieve such companies for liability for cartels. As we see, this absolutely lawful position is also accepted by judicial practice”, pointed out Dmitry Artyushenko.
Background: Article 11 of the Federal Law “On Protection of Competition” (“Ban of conemptition-0restircting agreements between economic entities”) does not apply to agreements between economic entities – members of the same group of persons, if one of such economic entities established control over another economic entity or if such economic entities are under control of the same person, except agreements between economic entities exercising types of activity, that are not allowed to be performed simultaneously by the same economic entity under the law of the Russian Federation. According to Article 11 of the Federal Law “On Protection of Competition”, control is understood as a possibility of a physical person or a legal entity directly or indirectly (through a legal entity or several legal entities) determine the solutions made by other legal entities, through one of several following actions: 1) Controlling more than 50% of the total votes corresponding to voting shares (stock) that form the registered (joint-stock) capital of a legal entity;2) Exercising the functions of an executive body of a legal entity.