FAS ISSUED A WARNING TO THE GOVERNOR OF THE ULYANOVSK REGION

His actions contain signs of restricting competition

The competition authority revealed that following binding Governor’s instructions, the Ulyanovsk Ministry for Competition Development and Regional Economy was allowed to pass tariff decisions only upon expert approval “Pricing Monitoring and Control Centre” Autonomous Non-Profit Organization (“PMCC”).

Although this is a non-profit organization, its Articles of Association specify that it can perform business and other operations that generate income. It means that “PMCC” meets the characteristics of an economic entity.

Furthermore, the “Centre of the Ulyanovsk region for Strategic Developments” (the ordering party) and “PMCC” (the executor) concluded a contract of paid services, the subject matter of which is “analyzing performance parameters of regulated sectors in the Ulyanovsk region”. The costs of services were over 7 million RUB.

Thus, the Governor of the Ulyanovsk region indicated the single organization rendering the services of economic and legal expert examination in state regulation of tariff by the authorities without competitive procedures. FAS established that other organizations also offer such services in the Ulyanovsk region.

Considering this, FAS concluded that “PMCC” could simultaneously affect tariff decision-making and render services of economic and legal expert examination in state tariff regulation. It pouts “PMCC” in unequal conditions with regard to other economic entities providing similar services in the Ulyanovsk region.

Therefore, actions undertaken by the Governor of the Ulyanovsk region have signs of restricting competition, which can lead to violating the Federal Law “On Protection of Competition” (Clause 8 Part 1 Article 15).

The Antimonopoly Service issued a warning to the Governor of the Ulyanovsk region, the deadline is 26 April 2019.

Reference:

The National Competition Development Plan sets the target to reduce the number of antimonopoly violations by the authorities and local self-government bodies at least twofold by 2020 in comparison with 2017.