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6th issue of Competition and Law

Dear colleagues,

As you will already have noted, the main theme of this issue is transfer pricing. The editorial staff is only beginning its research, but it can already be said that there is discussion of the ways to overcome an incomplete pricing mechanism in conditions of an economy that is still developing.

Those contributing to this issue discuss whether prices on the oil products, medicine and food markets are justified.

The reason for the discussion was the draft laws prepared by the Federal Antimonopoly Service (FAS) on the circulation of oil and oil products and on price formation on the oil products market in Russia. The main new elements and prohibitions are analysed by Associate from Yakovlev and Partners Legal Group, Ulyana Punanova, and lawyer at Taas Yuryakh Neftegazodobycha Ravil Basyrov. The authors stress that the purpose of the FAS is to protect the interests of independent gas service stations, and in addition, they suggest that even if the laws start working in the form contemplated by the competition authority, the situation on the oil market is hardly likely to undergo major change.

Tatyana Smirnova, Head of Legal Audit and Consulting at ZAO SIA International LTD discusses pricing policy in the pharmaceutical sector. According to her, not a single state can ignore a market that is as socially important as the pharmaceutical market, and sooner or later has to face the need to regulate pricing in this area of the sector. Russia already has significant experience of harsh regulation of the prices of medicines. However, Ms Smirnova notes that, as time has moved on and the legal base has developed, positive developments have been seen. Elena Lvova, Associate at Pepeliaev Group, gives her view of the problem.

Normally, only substitute goods fall within the boundaries of a product market. However, Vadim Novikov, (?)Senior Researcher, the Russian Presidential Academy of the National Economy and Public Administration, takes another view of the problem. Using the example of a well known court dispute regarding the raising by retail chains of prices for buckwheat and flour, he shows that on markets where a buyer prefers to buy goods not individually but in bulk or several at a time, the entire content of what is purchased falls within the boundaries of the market, even those parts of the purchase that could not be substituted.

Taking account of this particular feature and of other cluster markets (banking services, mobile communications etc), the author believes that many mistakes in applying antimonopoly law may be avoided.

The editorial staff of the journal has canvassed opinion among experts as to what the limits are of price regulation and what impact this has on business, consumers and competition as a whole. Answering our questions are Mazhit Esenbayev, Chairman of the Republic of Kazakhstan’s Agency for Competition Protection, Marina Gorokhova, Director of Competition Support Department  at the Russian Ministry of Economic Development, and Andrey Shastitko, General Director of the Bureau of Economic Analysis Fund.

In this issue, the editorial staff have also created a new feature, the ‘Question and answer ’. Taking part was Dmitry Stepanov, a Partner at attorneys-at-law Egorov, Puginsky, Afanasiev and Partners. Among other things, he spoke about how approaches are agreed to defining a group of persons from the standpoint of corporate and antimonopoly legislation.
Igor Tsvetkov, Professor of the Department of Commercial Law at the M.V. Lomonosov Moscow State University, raises a question that is very important in practice: how to apply article 13 of the Law on trade, given that the article in question contains various well known terms from antimonopoly legislation: ‘discriminatory conditions’, ‘bind [someone to something]’ and ‘product market’. In addition, these terms have no special definitions for the purposes of applying the law in question.

Also meriting considerable attention is the article of Andrey Gostyushev, Head of Department for Control of Regulatory Authorities, Altai Branch of the Federal Antimonopoly Service. Year after year, the Branch encounters instances of economic entities having their rights systematically violated by state authorities when land plots are allocated. Mr Gostyushev considers the consequences of such conduct to be extremely negative: land is distributed in breach of the rules of fair competition, or remains without a proprietor, and lies idle. The author gives general application to his division’s experience, and cites examples of case law regarding land law relationships.

Advisor in the FAS’s Department for Control of Housing and Public Utilities, Construction and Natural Resources Indira Shandieva in her contribution highlights the new developments in the third set of antimonopoly measures in terms of control over the conduct of public bidding processes.

The Director of the Civil Law Department at law firm CLIFF, Veronica Kazakevich, continues her series of articles devoted to the practice of applying Federal Law No. 94-FZ. Ms Kazakevich analyses the issues relating to clients’ establishing additional requirements on those involved in placing an order, as well as particular conditions on the subject of public bidding processes.

Valeria Barsukova, an Associate at Egorov, Puginsky, Afanasiev and Partners attorneys-at-law, unpicks how to fight against the irritant  faced absolutely by all users of the internet: spam.

In the view of Pepeliaev Group lawyer Maria Sedykh, the case with the deepest resonance of those dealt with in the overview of case law is the so-called ‘aluminium can case’ examined in November by the Presidium of the Russian Supreme Arbitration Court. The author of this column highlights the conclusions that may be drawn from this.
The issue is rounded off by our regular ‘Global experience’ column. Ksenia Belikova, Associate Professor in the Civil and Employment Law Department of the Law Faculty at the Peoples’ Friendship University of Russia, relates how, in Latin American countries, legislation is also in force that is aimed at protecting the competitive environment. In her article, Ms Belova cites the antimonopoly practice of Columbia.

Victoria Tsygankova, Editor in Chief, Competition and Law

     

















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