ARBITRATION COURT: GOVERNMENT OF THE ULYANOVSK REGION AND ULYANOVSK CITY AUTHORITY VIOALTED ANTIMONOPOLY LAW

Authorities unlawfully granted “Civilization” more than 4 billion RUB from the regional budget as subsidies for video surveillance services

In October 2018, Ulyanovsk OFAS found that the Government of the Ulyanovsk region, the Ministry of Digital Economy and Competition of the Ulyanovsk region (earlier – the Ministry of Developing Competition and Economy), the Ministry of Industry and Transport of the Ulyanovsk region and Ulyanovsk City Authority violated Clause 4 Article 16 of the Federal Law “On Protection of Competition” granting subsidies to “Civilization” for video surveillance services.

The antimonopoly law was violated by achieving and implementing an agreement on creating “Civilization” to fulfill the powers of the authorities and local self-government bodies for procurement of goods, works and services without using competitive procedures, specified in the Law on a contractual system to support performance of the system of photo- and video registration of traffic accidents and the project on “Video surveillance in the social field”.

The sum of subsidies planed for “Civilization” to support photo- and video registration of traffic accidents and the project on “Video surveillance in the social field” exceeded 4 billion RUB.

“Concerted actions of the Government of theof the Ulyanovsk region,the Ministry of Developing Competition and Economy, the Ministry of Industry and Transport and Ulyanovsk City Authority restricted entry of economic entities to competitive market. The authorities were ordered to eliminate the exposed violations of the antimonopoly law”, informed Marina Stepanova, Head of Markets Unit, Ulyanovsk OFAS.

The authorities disagreed with the decision and order of the antimonopoly body and foiled a lawsuit. Ulyanovsk Regional Arbitration Court fully supported OFAS position and dismissed the claim of the Government of the of the Ulyanovsk region,the Ministry of Developing Competition and Economy, the Ministry of Industry and Transport and Ulyanovsk City Authority.

Actions of regional and local authorities restricted competition in the fields where it exists.

Background:

Under the National Competition Development Plan, approved by No. 618 Order of the President of Russia, the number of violations committed by the authorities must be decreased twofold. The authorities also must implement antimonopoly compliance in their work – a set of regulations that prevent antimonopoly violations.