SARATOV OFAS: APPEAL COURT CONFIRMED LEGITIMACY OF 6 MILLION RUB FINE UPON “KRONVERK”

The construction company, together with local self-government bodies restricted competition on the market of housing construction

Earlier, Saratov OFAS opened a case against “Kronverk” Construction Company” Ltd. as well as the Authority and Property Management Committee of Engels Municipality due to concluding and participating in an anticompetitive agreement [1]. The case was opened upon materials forwarded form the Prosecutor’s Office of the Saratov region.

Under the frame of the anticompetitive agreement between the local self-government bodies and“Kronverk” Construction Company” Ltd., the type of allowed use of a land plot was changed from “constructing a car showroom” to “construction of multi-floor apartment houses” in Engels, Chimikov Avenue and Stroitelei Avenue. As a result, the company obtained the lease right for a land plot to carry out construction without competitive bidding. It restricted competition on the market of housing construction. Also and“Kronverk” Construction Company” Ltd., implemented the anticompetitive agreement by building an apartment house in the plot.

Saratov OFAS held the construction company administratively liable and fined the company 6 million RUB [2]. “Kronverk” Construction Company” Ltd. disagreed with the decision of Saratov OFAS and attempted to appeal it but Court of First Instance and Appeal Court supported the position of Saratov OFAS.

Reference:

[1] Violating Part 4 Article 16 of the Federal Law “On Protection of Competition”

[2] Part 4 Article 14.32 of the Code of the Russian Federation on Administrative Violations