FAS RUSSIA FOUND CARTEL IN THE MARKET OF ORTHOPEDIC PRODUCTS

By entering into anticompetitive agreement, six companies wholesaling orthopedic products set and maintained the highest price of products sold

The FAS Russia found Trives Trade LLC, MedExpert LLC, Optomed LLC, Maltri LLC, ORTO LLC and Ecoten guilty of violating the Law on Protection of Competition[1] in the wholesaling of orthopedic products.

The companies entered into an anti-competitive collusion to set and maintain prices for wholesale products at the optimal level for each supplier by setting and monitoring compliance with the recommended retail prices for products sold by the defendants. Trives trade LLC, MedExpert LLC, Optomed LLC, Maltri LLC, ORTO LLC also used an online price monitoring service that allows colluded companies to track prices not only from their own customers, but also from companies that purchase similar products from other suppliers and agree to apply "sanctions" to those retailers who sold products at prices below the recommended ones.

Based on the detected violations of the Antimonopoly legislation, the FAS Russia is preparing to initiate a case on administrative violations.

“As a result of such collusions, unscrupulous entrepreneurs receive excess profits, while consumers who are forced to overpay pay for it. This situation is further aggravated by the fact that the defendants sell such socially important products as orthopedic products. Such actions, according to the current legislation, entail not only administrative liability in the form of turnover fines, but also criminal liability for officials of companies that colluded,” said Andrey Tsarikovskiy, Stats-Secretary –Deputy Head of the FAS Russia. In the near future, we will send the decision on the case to law enforcement agencies for making procedural decisions. And I want to remind you once again that in addition to the fear of punishment, every entrepreneur must also have a social responsibility to the citizens of the country where we live and work”.

“One of the main arguments of the defendants was that their actions to set recommended prices and control their compliance should be considered as permissible vertical agreements. However, it is one thing when one company with a small share in a competitive market tries to dictate terms to its distributors, and quite another when six supplying companies agree among themselves and jointly, including using price algorithms, set and control prices in the retail segment. Such agreements cannot be recognized as permissible and in the near future the defendants will be brought to justice,” explained Andrey Tenishev, Head of the Anti-Cartel Department of the FAS Russia.

[1] Paragraph 1 of the Part 1 of the Article 11