TECHNICAL FAILURES ON E-SITE RESTRICTED COMPETITION IN AUCTIONS FOR SALE OF DEBTOR’S PROPERTY IN THE CENTRE OF ST PETERSBURG

“STEP” failed to provide due operation of a trading site and as a result several auction participants could not bid and two companies won with the minimum price increase

FAS considered three complaints against actions of “STEP” Ltd. - an e-site operator and the North-West Centre of Research-and-technological Support of Industrial Security and Expert Examination in the course of selling debtor’s property at auctions – 8 apartments in the centre of St Petersburg. The area of each apartment exceeded 100 m² and the initial price varied from 6.9 to 7.4 m RUB.

An investigation revealed that all three bidders had their accounts blocked at the same time, preventing them making price bids. The blocked bidders contacted the support service to unblock access to their accounts but they still could not take part in the bidding. 

“Simultaneous blocking of several bidders was due to unstable work of the system. The operator failed to ensure proper operation on the e-site, which affected the outcome of the auctions. Very low competition was for 7 lots, with 2 - 11 price bids that increased the low value from 5000 to maximum 50000 RUB, and only one lot had 180 bids, raising the initial price by 1 m RUB, which means that there was demand for the lots”, explained Head of FAS Department for Control over Construction and Natural Resources, Oleg Korneev.

According to Deputy Head of FAS Department for Control over Construction and Natural Resources, Oksana Malaya, the operator failed to ensure uninterrupted auction and equal access of all bidders, so FAS issued orders to the e-site operator and the auction organizer. The auctions (lots 5, 8, 10-15) must be repeated and the auction organizer should set the new date and time for accepting the auction applications.

According to Deputy Head of FAS Rachik Petrosyan, technical failures on e-sites that lead to restricting competition are a pretty frequent phenomenon.  

“The risks of abuses by e-sites and auction organizers can be decreased through unification and simplifying the auction procedure, transferring it to the all-Russian e-sites”, emphasized Deputy Head of FAS Rachik Petrosyan.