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6–7 октября 2022 г. в Алматы пройдет VIII Евразийский антимонопольный форум. Организаторы – Агентство Республики Казахстан по защите и развитию конкуренции, Центр защиты конкуренции, Альянс антимонопольных экспертов и Международный центр конкурентного права и политики БРИКС.
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Главная /  Article /  An antitrust strike at inflated prices is being...
An antitrust strike at inflated prices is being prepared

Elena Sokolovskaya,
Chief Expert of Competition and Law journal

The economic sanctions imposed, together with other restrictive measures, have caused a surge in prices of many food items and socially important goods. Consequently, the number of applications from citizens to the Russian Federal Antimonopoly Service has increased, including at the level of the country’s regions. In order to identify violations in pricing and to counter the actions of bad-faith business entities in a more efficient and timely manner, amendments to antimonopoly legislation have been devised. Let us consider the proposed tool for pricing control.

 

In internal markets, an increase in prices of goods does not always directly reflect intrinsic economic developments. Sometimes, it is caused by the bad-faith behaviour of market players who pursue a speculative economic policy in relation to consumers. In this connection, a paramount objective of the regulator is to prevent artificially inflated prices.

In order to prevent such actions of business entities, which result in goods having an economically unjustified price, the Federal Antimonopoly Service together with the Russian Ministry for Economic Development have devised a draft federal law “On amending Federal Law No. 46-FZ dated 8 March 2022 “On amending certain items of the legislation of the Russian Federation” (the “Draft Law”).

It is proposed to introduce, between 2022 and 2024, a ban on concerted actions of business entities envisaged by antimonopoly legislation, which result in an economically unjustified price of goods. It is mentioned that this ban will not apply to parties whose position cannot be recognised as dominant according to articles 5(2.1) and 5(2.2) of the Federal Law No. 135-FZ “On Protecting Competition” dated 26 July 2006 (the “Competition Law”). Thus, an exception is envisaged for companies whose revenues have not exceeded RUB 800 million over the past year.

 

 

The basic idea of the amendments is to regulate pricing control tools at the level of legislation

 

The antimonopoly authority will assess whether the conduct of a market player displays signs of concerted actions by virtue of a commission of the Russian Government, which is sent if the Ministry for Economic Development has provided the relevant opinion. Such opinion should set out conclusions concerning the significant increase in prices on the commodities market (either federal, regional, or local). It should be stressed that, according to the Draft Law, an increase in a price is considered significant if it accounts for more than 30% over 60 days. An economically unjustified price is a price of goods which has not been driven by a drastic change in either demand or supply, adjustments in regulated tariffs and prices of raw materials and components.

In addition, if signs of a violation have been identified in the actions of a business entity, the regulator may, before an antimonopoly case is instigated, issue a binding warning to such business entity to cease such acts or omissions and prevent them in the future as prescribed by the Competition Law.

The Draft Law provides that, if the warning is complied with, no case of a violation of antimonopoly legislation should be initiated and the business entity is not administratively liable for such violation since the latter has been eliminated. On the other hand, if the warning has not been complied with, a decision is made to initiate a case.

If an increase in prices is unjustified, the territorial body of the Federal Antimonopoly Service will be able to issue a warning and initiate a case only with the consent of the central department of the service.

Overall, the idea of the authors of the initiative is that the tools of pricing control should be regulated at the legislative level. This, for its part, will allow the bad-faith actions of business entities to be prevented.

 

 

A main element is excluded from the disposition of this violation, namely, a public statement

 

However, certain provisions of the Draft Law give rise to concerns.

For instance, by virtue of article 8 of the Competition Law, the concerted actions of business entities are characterised by a number of features, including that companies are related as well as are aware of such actions. A key criterion of concerted actions is a public statement of changes in the market behaviour.

However, in line with the Draft Law, it is redundant to prove that such signs exist when identifying concerted actions; it is enough to establish only the fact that the price was inflated and ‘unjustified’. Thus, a main element is excluded from the disposition of this violation, namely, a public statement.

On the one hand, such approach can help the Federal Antimonopoly Service to instantly intervene when there is a price inflation, and, among other things, use prompt response measures by issuing warnings.

On the other hand, we believe that the implementation of this approach may reduce the standard of proof in relation to these elements of a violation of antimonopoly legislation.

Currently, the Draft Law is undergoing public discussion; its final version has not been approved yet. If, however, the proposed amendments are adopted in their initial wording, it is only law enforcement practice that will show whether our fears are grounded.


08 августа 2022 г.
Опрос
Предлагаемые в пятом антимонопольном пакете меры достаточны для выявления и пресечения антиконкурентных практик цифровых платформ?