ANDREY TENISHEV: CARTEL PARTICIPANTS THEMSELVES DEFINE MARKET BOUNDARIES

FAS adheres to this principle investigating cases on cartels and price coordination [1]

Head of FAS Anti-Cartel Department Andrey Tenishev explained how the antimonopoly authority investigates such cases using an example of several investigations against IT-giants. On 13 March, he was a speaker at the Forum on “Antitrust in a rapidly changing world: modern challenges and new opportunities”.

“First that crosses people’s mind, when we see the same prices for the same goods in retail and wholesale segments – it is a cartel. Such version exists but it should not be the only one”, said Andrey Tenishev at the outset.

Then he described an antimonopoly case against “Apple”, when the company had recommended resellers to fix and maintain prices for several new models and monitor retail prices in online-stores and retail outlets.

“We worked on four versions of reasons why Iphone prices were the same across the entire country: collusion between retailers, effect of objective economic factors, concerted actions and unlawful economic coordination”, informed Head of FAS Anti-Cartel Department. “As a result, one version was proved – a Russian subsidiary of “Apple” coordinated prices of most resellers for smartphones”.

The Antimonopoly Service investigated similar cases against LG, Samsung and HP, as well as one of the official Philips suppliers.

Andrey Tenishev also mentioned that that in order to define market boundaries in the course of investigating cases on cartels price coordination, FAS rationale is that participants of anticompetitive actions themselves define both geographic and product boundaries.

In his opinion, coordination of economic activities can be recognized unlawful if it leads to fixing the same mark-ups for initially different goods prices.

President of the “Corporate Counsel Association” Non-Profit Partnership, Alexandra Nesternko pointed out: “The issue of anticompetitive coordination of prices was discussed repeatedly in the practice of the Federal Antimonopoly Service. Only in the past several years FAS considered a number of cases on retail price coordination against the leading Russian and international companies. In this context,the Corporate Counsel Associationformed a Working Group to systematize the practice on cases for coordinating retail prices and developing approaches on the aspects that are not reflected in the practice so far. The Group drafted a document summarizing the main approaches to investigating such cases, including delineation of price coordination and anticompetitive agreements on fixing prices, elements of price coordination, etc. The draft is presented to the Federal Antimonopoly Service at the Forum and a dialogue is launched on refining the document in order to issue official explanations or guidelines from the Antimonopoly Service”.

[1] № 220 FAS Order "On approving the Procedure for analyzing the state of competition on the market" of 28.04.2010 (version of 20.07.2016).