Cartel syndrome

Cartels form a threat to the economic security of Russia

Underlines the Federal Antimonopoly Service (FAS Russia) in 2016 Report on the state of competition.

The antimonopoly body confirms the fact of an annual increase of the number of cartels and other anticompetitive agreements. 692 cases on anticompetitive agreements were opened in 2016, of which 330 cartel cases, - 18% more than in 2015 (282 cases). More than 80 % cartel cases concern big-rigging (298 cases), which is mover that 30% more than in 2015 (232 cases).

Before 2014, big-rigging cartels were formed by no more than 10 economic entities and their operations usually covered several procurement procedures. In 2015 – 2016 the number of economic entities involved in the same cartel often reaches dozens, and a single cartel may operate at dozens and hundreds of tenders and auctions.

Unlawful agreements, including the most dangerous ones – cartels – are widespread across all sectors of Russian economy, particularly, of strategic importance – allocation and harvesting aquatic biological resources, medication and food products supplies.

For instance, cartel operations for the purposes of maintaining prices on public procurement of medicinal drugs and medical products are exposed in 80 subjects of the Russian Federation, which, undoubtedly, has an adverse impact upon the state of competition.

A growing cartelization of the economy as a new challenge to economic security of the Russian Federation requires adequate measures from the state and the society.

It is essential to implant intolerance to cartels and other anticompetitive agreements in the public perception and business-culture. A big role here may be played by the community, such as “For fair procurement” movement, the All-Russia People’s Front, corporate unions: the Antimonopoly Expert Association, the Corporate Counsel Association, etc.

One of the efficient tools for preventing anticompetitive agreements is implementing antimonopoly compliance by economic entities, which will enable to bring the necessary knowledge about antimonopoly bans to every staff member and can play a significant preventative role.

The ways to resolve the issue were outlined by Head of FAS Igor Artemiev to the Government of the Russian Federation on 5 October 2017.