FAS Russia's activities towards preventing unfair competition

Unfair competition causes considerable harm to the developing economy of the Russian Federation and emerging business practices. Therefore, the Federal Antimonopoly Service, that has the authority to stop unfair competition, makes significant contribution to creating sustainable competitive market in the Russian Federation.



In its work towards preventing unfair competition, FAS Russia is governed by the №135-FZ Federal Law of 26.07.2006 «On Protection of Competition» (further on referred to as the Law «On Protection of Competition»), which defines the concept of unfair competition and its specific forms.



Unfair competition is understood as any activities carried out by economic entities (a group of persons) towards obtaining advantages throughout their entrepreneurial activity, which violate the legislation of the Russian Federation and are inconsistent with the established business practices and the principles of integrity, reason and justness, and inflicted or can inflict damages to other economic entities - their competitors, or caused harm or can cause harm to their business reputation.



Unfair competition may take the following main forms:



1) Disseminating false, inaccurate or distorted information that can cause damages to an economic entity or can harm its business reputation;

2) Misleading other market agents with regard to the nature, methods and location of production activities, consumer qualities, quantity and quality of goods, or with regard to the goods producers;

3) Making incorrect comparison by an economic agent of the goods manufactured or sold by this agent with the goods manufactured or sold by other economic entities;

4) Selling, exchanging or otherwise introducing the goods into circulation, if it involves illegal use of the results of intellectual activity or equivalent means of individualization of a legal person, means of individualization of the goods, works and services;

5) Illegal obtaining, using or revealing information that constitutes business, professional or other secrets protected by law.



Separate clauses forbid unfair competition related to obtaining and using exclusive rights on means of individualization of the goods, works and services.



At the same time FAS Russia does not limit its work to stopping the above-listed forms of unfair competition, as unfair competition can take new forms that are not defined in the Law «On Protection of Competition».



A case on preventing unfair competition should be based on a petition submitted by an economic agent regarding the actions of its competitor that are covered by the definition of unfair competition. Also FAS Russia has the authority to initiate cases on breaching the antimonopoly legislation independently. The petitioner should present all available evidence regarding the breach of the legislation on unfair competition. The case will then be heard by the FAS Russia's Commission under the Chairmanship of a Deputy Head of FAS Russia. Members of the Commission will give objective and comprehensive consideration to the case materials, presented by both the petitioner and the violator. Having considered the case, the Commission makes a collegial decision. If necessary, the Commission may issue a determination, which is mandatory.



Currently FAS Russia has devised amendments to № 318652 draft Federal Law «On Introducing Amendments to the Code of Administrative Violations of the Russian Federation», which establishes administrative liability for unfair competition: individuals (officials) will be fined from 12.000 to 200.000 Rubles; legal persons - from 100.000 to 500.000 Rubles. It is also proposed to establish fines for unfair competition practice related to introduction goods into circulation with illegal use of the results of intellectual activity and equivalent means of individualization of a legal person, means of individualization of the goods, works and services: for officials - 20.000 Rubles, for legal persons - from thousandth to hundredth part of the proceeds gained from selling goods (works, services), but no less than 100.000 Rubles.



Also Part 7 has been added to Article № 1252 «Protection of Exclusive Rights» of the draft 4 Part of the Civil Code of the Russian Federation N 323423-4. Part 7 states that when according to the established procedures the breach of an excusive right on the results of intellectual activities or the means of individualization is recognized as unfair competition, protection of the breached exclusive right can be exercised by means specified in the Code, as well as under the antimonopoly legislation. Currently the draft Part 4 of the Civil Code of the Russian Federation N 323423-4 is adopted by the State Duma of the Federal Assembly of the Russian Federation in 3rd reading.