CONSTITUTIONAL COURT SUPPORTED FAS ON INADMISSIBILITY OF EXPANDING LEGISLATIVE IMMUNITIES FOR CARTELS

It concerns the case of Samara developers, which were fined for 138 million rubles for an anticompetitive agreement at auction

Earlier, PPSO JSC "Aviakor" CJSC and SZ Koshelev-Project Samara JSC concluded an anti-competitive agreement. It was declared illegal by the Samara Regional Office of FAS Russia. For this violation of the Law on Protection of Competition [1], a fine was imposed on the companies.

The companies did not agree with the decision of the Samara Regional Office of FAS Russia and appealed to the court. However, the courts of all instances recognized the decision of the authority as legitimate.

Members of the same group of persons Specialized Developer Koshelev-project Samara JSC and Koshelev-project JSC appealed to the Constitutional Court of the Russian Federation. Organizations tried to challenge the constitutionality of the provisions of the Law on Protection of Competition [2].

In their opinion, the norm of Part 8 of Article 11 should be interpreted broadly and not recognize as cartel participants persons who insist on being controlled on other grounds. The companies also considered that such an approach contradicts several provisions of the Constitution of the Russian Federation at once, as it restricts the freedom of economic activity and the right to fair judicial protection.

The closed list of grounds for control is enshrined in the Law on Protection of Competition, which excludes the possibility of subjective discretion and manipulation of facts. It is also confirmed by the position of the Plenum of the Supreme Court of the Russian Federation [3].

At the same time, the criteria of control must be legally defined. Otherwise, prerequisites may be created for the subjective approach of the authority and the abuse of the subjects of responsibility to create the illusion of controllability.

The Constitutional Court of the Russian Federation concluded that an expansive interpretation of the contested norms would hinder the achievement of the objectives of antimonopoly regulation.

The Constitutional Court of the Russian Federation in its Ruling stressed that non-proliferation of exceptions to the prohibition of cartels at auctions on economic entities [4] cannot be considered as a disproportionate restriction of their rights and discrimination.

As a result, the Constitutional Court of the Russian Federation recognized Part 8 of Article 11 of the Law on Protection of Competition as not contradicting the Constitution.

For reference:

[1] Paragraph 2 of Part 1 of Article 11 of the Law on Protection of Competition

[2] Part 8 of Article 11 and Part 1 of Article 17 of the Law on Protection of Competition

[3] Resolution of the Plenum of the Supreme Court of the Russian Federation of March 4, 2021 No. 2

[4] Economic entities forming a group of persons, but not complying the regulatory control criteria