FAS: SITE ORGANISING PRIVATIZATION AUCTIONS CANNOT FORBID USERS TO FILE AUCTION BIDS

Moscow Arbitration Court supported FAS decision and ruling that Russian Auction House had infringed the user rights for participating in competitive bidding, which resulted in restricting competition at auctions

At the end of 2018 FAS received a complaint from “Zolotie Klyuchi” MPF”  regarding actions of an e-site operator – “Russian Auction House” JSC (RAH) in the course of an auction for selling a residential building with a land plot in Tyumen at 2.6 million RUB initial price.

The FAS Commission established that RAH had infringed the company’s rights for filing auction bids, which caused denial of its access to the auction and restricted competition at the auction.

The functionalities of the RAH web site enables users to file auction bids only after the advance payment security is received on the RAH account, which is contrary to the Law on privatization and leads to restricting auction access. RAH was ordered to amend its Regulations in the part of the procedure of operating monetary funds.

“According to the current law, bids can be filed regardless of the time of paying the deposit: prior or after filing a bid. Thus, the site Regulations that do not allow users to file auction bids before the funds are received on the site account are unlawful and contain the risks of restricting competition at auctions. Undoubtedly, the deposit should be paid by the deadline set by the organizer; however, by law it has no connection at all to the timing of filing bids”, emphasized Deputy Head of FAS Rachik Petrosyan. “The Court supported the decision and determination of the antimonopoly body on the case. I would like to point out that RAH could be not the only site that infringed users’ rights in such a manner. To protect competition at auctions and prevent infringement of the rights of potential auction bidders, we drew attention of the sites organizing privatization auction that they must adjust their regulations and the operating procedures in line with No.178-FZ Federal Law”.