Cassation Court confirmed legitimacy of the fines imposed upon a bid-rigging cartel at crab auctions

The Arbitration Court of the Far East District upheld the rulings of the Courts of First Instance and Appeal Courts and confirmed administrative fines imposed upon “Aquaresource-DV” Ltd. and “Taifun” Ltd. as cartel members. Earlier, the Federal Antimonopoly Service (FAS Russia) established that damages to the state caused by the cartel reached more than 72 million RUB.

Background: FAS found that “Aquaresource-DV” Ltd., “Taifun” Ltd. and “Kometa” Ltd. violated Clauses 2, 3 Part 1 and Clause 3 Part 4 Article 11 of the Federal Law “On Protection of Competition”. FAS also established that the companies had entered in an anticompetitive agreement with Rosrybolovstvo [the Federal Fishery Agency] and its branch in Primorie aimed at restricting competition in the course of the auctions.

The cartel prevented entry of other market participants to the auctions for a contract on the quotas for catching aquatic biological resources (horsehair crab, blue crab, king crab) in Primorie sub-zone.

“Aquaresource-DV” Ltd. and “Taifun” Ltd. filed a lawsuit appealing FAS decision against the cartel participants and the fines. The Courts of three instances, however, agreed with the regulator’s position in both cases.

“The anticompetitive actions were exposed and suppressed with active cooperation between FAS and the Investigation Offices of Primorie Investigation Committee of the Russian Federation and the Office of the Federal Security Service in the Primorie region. Our colleagues gave us a number of materials necessary for the investigation: documents, witness interview protocols and audio-records. Result-oriented assistance of the law enforcement bodies in collecting and registering evidence of violating the antimonopoly law is an integral part of the national policy for supporting competition in the markets”, explained the Head of FAS Anti-Cartel Department, Andrey Tenishev.

“Under the strategy of the national security of the Russian Federation, the markets of catching and selling aquatic biological resources are of strategic importance. Therefore, they are under continuous and thorough control by FAS.  The rulings of Arbitration Courts confirm the inevitability of punishing cartel participants for exercising prohibited actions – restricting competition at the auctions”, pointed out Deputy Head of FAS Alexander Kinev.