COURT PRONOUNCED REASONABLENESS OF FAS ORDER REGARDING “PAMYAT” CEREMONIAL ENTERPRISE”

The company provides ceremonial services. It was held liable for entering and pursuing an anticompetitive agreement

Moscow Arbitration Court dismissed a claim of “Pamyat” CJSC to abolish an order issued by the antimonopoly authority to hold the company administratively liable for concluding and pursuing an antimonopoly agreement and imposed a 720 853 RUB fine upon the company [1].

Prior to this, the FAS Commission found that the Municipal Service Department of the Volgograd Authority and “Pamyat” Ceremonial Enterprise” CJSC concluded and executed an agreement that leads (or can lead) to restricting competition on the market of funeral services in Volgograd. The company and the Volgograd Authority received orders to stop the violations and to undertake actions aimed at competition support.

As established in the course of the investigation, the economic entity and the local self-government body entered into two contracts in 2002: the contract for carrying out funerals [2] and the contracts for servicing cemeteries and columbaria, their maintenance and capital repair [3]. Both deals were concluded for 15 years.

In March 2017, between additional agreements, the validity period of the contracts was extended for 10 years. At the same time, in accord with the additional agreements, the works should have been provided at no charge since 1 March 2017. Therefore, the Volgograd Authority and “Pamyat” Ceremonial Enterprise” CJSC effectively concluded new contracts for a new period – up to 2027, without competitive proceedings.

At the same time, making the decision to extend the contracts for servicing cemeteries, the Volgograd Authority ignored other potential market participants and those potentially wishing to enter into a contract for servicing municipal cemeteries in Volgograd, their maintenance and capital repair.

Reference:

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

[2] № 12 of 30.09.2002 (providing for body carriage).

[3] № 8/1 of 30.09.2002.