Press-release of 13.07.2010

The Federal Antimonopoly Service (FAS Russia) published on its web-site a draft law on introducing amendments to the Federal Law "On Protection of Competition" and some other legislative acts of the Russian Federation (the so-called "third antimonopoly package" of laws.

The "third antimonopoly package" clarifies:

- the procedures for applying the antimonopoly law to actions of persons outside the Russian Federation and affecting competition within Russia. In particular, it clearly defines types of transactions by foreign companies that are subject to approval by the antimonopoly authority (based upon the criterion of sales volume in the Russian Federation);
- the concept of coordinating economic activities: it is only possible by a person that does not operate in the same market where coordination takes place;
- the concepts of competition-restricting agreements and concerted actions, which are not applicable to economic entities members of the same group of persons or controlled by the same person;
- the list of financial services that require competitive budding to select financial organizations;
- the procedures for notifying a person about an inspection and requesting documents and information.

The "third antimonopoly package" also:

- establishes additional criteria that should be included in the Rules for non-discriminatory access to the markets and the goods/ services of natural monopolies. These criteria are aimed at increasing the level of availability of consumer information; determining conditions for access to goods and services of natural monopolies; and applying standard agreements;
- excludes criminal liability for concerted actions;
- introduces fixed fines for abusing market dominance on the cases not related to restriction of competition.

The "third antimonopoly package" liberalizes the norms of antimonopoly law, particularly, for vertical agreements.

To determine monopolistically high prices, the antimonopoly is obligated to use apart from the "cost plus" method also the method of compatible markets. The price developed through exchange auctions cannot be found monopolistically high.

The "third antimonopoly package" also obligates FAS Russia to consider fair exchange price when determining monopolistically high price.

The draft law clarifies the concept of concerted actions: the legal definition now includes qualifying criteria distinguishing concerted actions from simple parallel actions on the market caused by common conditions for market players.

The amendments separate the concepts of agreements and concerted actions under two different Articles.

The period of appeal of the FAS Russia's decisions will be unchanged: three months.

The amendments also liberalize the market of financial services. It is proposed to abandon the so-called agreement notification, when market participants must notify FAS Russia about concluded agreements. "When the parties have doubts that all competition norms are observed in the agreement, it can be sent for expert examination to the antimonopoly authority", says the Head of FAS Russia Igor Artemyev.

Under the draft law, concerted actions will become an administrative rather than criminal offence. Turnover fines will be replaced with fixed fines for the sectors, where turnover is high but profit margin is minimal.

"Therefore, "turnover fines" will not be applicable to roughly half of all cases. Violations that have not led to restriction of competition will be punished by fixed fines, for instance, 1million Rubles. This way, we'll remove some of the risks for business", concluded the Head of FAS Russia Igor Artemyev.