Antimonopoly Law in Russia: Protecting Your Business from Monopolistic Activity and Dominant Entities

 

March 16, 2022

BRACE Law Firm ©

 

Monopolistic activity refers to the abuse of a dominant position by an Economic Entity or a group of persons, agreements or concerted actions prohibited by antimonopoly legislation, and other actions (omissions) recognized as monopolistic activity in accordance with federal laws.

As a general rule, Russian jurisdiction does not prohibit the existence of monopolies; however, it does not allow monopolies to conduct activities that substantially restrict competition or otherwise violate the rights and legitimate interests of third parties. To prevent the restriction of third-party rights, Russian legislation provides a wide range of measures to limit monopoly activities, establishes requirements that monopolists must follow when conducting their business, and offers a significant arsenal of tools to combat prohibited activity.

Federal Law No. 135-FZ dated July 26, 2006, On Protection of Competition (the "Law No. 135-FZ", "Law on Protection of Competition", or "Competition Law") regulates the activities of monopolies in Russian legislation.

Prohibited Types of Monopolistic Activity

The activities of monopoly companies are subject to strict regulation to prevent violations of third-party rights. When analyzing which activities may be recognized as monopolistic, the following groups can be broadly distinguished.

Abuse of a Dominant Position

A dominant position is the position of an Economic Entity (group of persons) or several Economic Entities (groups of persons) on the market for a specific product that enables such Economic Entity (group of persons) or such Economic Entities (groups of persons) to exert a decisive influence on the general conditions of product circulation in the relevant commodity market, and/or to eliminate other Economic Entities from that commodity market, and/or to impede access to that commodity market for other Economic Entities. An Economic Entity is recognized as occupying a dominant position in the market if it:

• Has the ability to act independently of competitors and consumers in the market for a specific product and possesses the ability to independently and unilaterally exert a decisive influence on the general conditions of product circulation in the relevant commodity market;
• Can eliminate other Economic Entities from the commodity market or impede their access to the commodity market.

Therefore, when verifying whether an Economic Entity dominates a commodity market, the Antimonopoly Authority assesses its position relative to existing competitors (market share), potential competitors (market access capability), and consumers.

An Economic Entity is presumed to hold a dominant position if its share in the market for a specific product exceeds 50%. In cases where the share of an Economic Entity in the product market is less than 50%, the Antimonopoly Authority must prove the existence of a dominant position using other criteria. Among others, the following criteria are considered:

• The presence or absence of administrative barriers to market access for potential competitors (e.g., the requirement to obtain licenses and permits for specific activities, or the mandatory consent of a right holder to use intellectual property);
• The presence of significant economic advantages for the Economic Entity (e.g., access to natural resources, production technologies, or capital markets);
• Arguments regarding the substantial (extraordinary) costs that counterparties of the Economic Entity would incur if they switched to purchasing goods from other suppliers. [1]

It is also necessary to consider whether consumers have the ability to counteract the influence of the Economic Entity in the commodity market, for example, due to the significant share held by specific consumers in the market and/or the commercial significance of the consumers to the supplier. Furthermore, the fact that an organization conducts business in violation of established procedures (e.g., without a license or other permit) does not prevent that organization from being recognized as occupying a dominant position in the relevant commodity market. [2]

The first of these conditions is quantitative, while the second and third relate to qualitative characteristics, as they allow for an assessment of the ability of such Economic Entities to influence the conditions of product circulation and the state of competition in the commodity market.

The Antimonopoly Authority may not determine dominance solely based on the market shares of Economic Entities (i.e., solely on a quantitative criterion) without considering all qualitative characteristics of the commodity market. [3]

Abuse of a dominant position is characterized by the following set of interrelated elements:

1. The dominant position of the Economic Entity;
2. The commission of an act (omission) by the Economic Entity;
3. The occurrence or potential occurrence of negative consequences in the form of the prevention, restriction, or elimination of competition and/or the infringement of the interests of other persons (Economic Entities) in the sphere of entrepreneurial activity, or an indefinite circle of consumers;
4. The existence of an objective link between the dominant position, the commission of the act, and its negative consequences or the possibility of such consequences.

All the above circumstances are established, including in cases involving the abuse of a dominant position by one or several Economic Entities recognized as collectively dominant.

An Economic Entity occupying a dominant position in a commodity market faces high antimonopoly risks because its position allows it to significantly influence product circulation conditions and the state of the competitive environment. In this regard, ensuring the good faith of such persons’ actions becomes particularly important. This task is achieved by establishing prohibitions on actions that exceed the limits of permissible behavior.

According to Part 1, Article 13 of the Law on Protection of Competition, the following actions specified in Part 1, Article 10 of the Competition Law may be recognized as impermissible:

• Economically or technologically unjustified reduction or termination of product manufacture;
• Creation of discriminatory conditions;
• Creation of barriers to market entry or exit;
• Price manipulation in the wholesale and/or retail electricity (capacity) markets.

The Competition Law provides conditions under which such actions may be recognized as permissible, specifically:

1. If such actions (omissions) do not enable individual persons to eliminate competition in the relevant commodity market;
2. If they do not impose restrictions on participants or third parties that do not correspond to the achievement of the objectives of such actions (omissions), provided the result of such actions is or may be:

• The improvement of production or sales of goods, the stimulation of technical or economic progress, or the enhancement of the competitiveness of Russian-made goods in the global commodity market;
• The receipt by buyers of advantages (benefits) commensurate with the advantages (benefits) received by Economic Entities as a result of the actions (omissions). [4]

Economic Entities may expect their actions (agreements) to be recognized as permissible only if these conditions are strictly established and the results are achieved (or potentially achieved) in aggregate. An example of permissible actions is behavior that complies with the rules of non-discriminatory access to the services of natural monopolies approved by the Government in accordance with Part 3, Article 10 of the Law on Protection of Competition.

Currently, the following regulations are in effect:

1. Rules for Non-Discriminatory Access to Services regarding:

• Electricity transmission and the provision of these services;
• Operational dispatch control in the power industry and the provision of these services;
• The administrator of the wholesale market trading system and the provision of these services.

2. Rules for the Technological Connection of power-receiving devices of electricity consumers, power generation facilities, and electric grid facilities belonging to grid organizations and other persons to electric grids.

3. Rules for Ensuring Non-Discriminatory Access to the services of natural monopoly entities for the transportation of oil (oil products) via trunk pipelines in the Russian Federation.

4. Rules for Ensuring Access to the services of natural monopoly entities at airports.

Execution of Agreements or Other Concerted Actions

Agreements between competing Economic Entities (i.e., between Economic Entities selling goods in the same commodity market or between Economic Entities purchasing goods in the same commodity market) are recognized as cartels and are prohibited if such agreements lead to or may lead to:

1. The establishment or maintenance of prices (tariffs), discounts, markups (surcharges), and/or margins;
2. The increase, decrease, or maintenance of prices at auctions;
3. The division of the commodity market by territory, volume of sales or purchases, assortment of goods sold, or the composition of sellers or buyers (customers);
4. The reduction or termination of product manufacture;
5. Refusal to execute contracts with specific sellers or buyers (customers).

According to Part 1, Article 8 of the Law No. 135-FZ, concerted actions of Economic Entities are actions taken in the absence of an agreement that satisfy the following set of conditions:

• The result of such actions corresponds to the interests of each of the specified Economic Entities;
• The actions are known in advance to each participating Economic Entity due to a public statement by one of them regarding the commission of such actions;
• The actions of each specified Economic Entity are caused by the actions of other Economic Entities participating in the concerted actions and are not a consequence of circumstances that equally affect all Economic Entities in the relevant commodity market.

Clause 18, Article 4 of the Law No. 135-FZ establishes that an agreement is an arrangement in written form contained in a document or several documents, as well as an arrangement in oral form. The implementation of an agreement concluded between Economic Entities implies predictable individual behavior of formally independent entities, determining the purpose of their actions and the reason for each choosing a particular model of behavior at auctions. Thus, an arrangement between Economic Entities in any form may be recognized as an agreement if evidenced by coordinated and purposeful actions (omissions) of these entities, which consciously make their behavior dependent on the behavior of other market participants, performed in a specific commodity market, falling under the criteria of restricting competition, and capable of leading to the results specified by the Law No. 135-FZ.

As explained in Clause 2 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 30 dated June 30, 2008, On Certain Issues Arising in Connection with the Application of Antimonopoly Legislation by Arbitration Courts, when analyzing whether the actions of Economic Entities in a commodity market are concerted, arbitration courts should consider that the coordination of actions may be established even in the absence of documentary evidence of an arrangement to commit them.

A conclusion regarding one of the conditions required to recognize actions as concerted — specifically, that the commission of such actions was known in advance to each Economic Entity — can be made based on the factual circumstances of their commission. For example, the fact that actions were performed by various market participants in a relatively uniform and synchronous manner in the absence of objective reasons may indicate the coordination of actions.

Evidence of objective reasons for an Economic Entity's own behavior in the commodity market and/or the lack of dependence of its actions on the actions of other persons may confirm the absence of a violation in the form of concerted actions by that specific Economic Entity.

A similar position regarding anti-competitive agreements is reflected in Clause 9 of the Review of Judicial Practice on issues arising during the consideration of cases on the protection of competition and cases on administrative offenses in the specified sphere (approved by the Presidium of the Supreme Court of the Russian Federation on March 16, 2016), which states that the existence of an anti-competitive agreement does not depend on its execution as a contract under the rules established by civil legislation, including requirements for the form and content of transactions, and may be proven using a set of other evidence, including the actual behavior of Economic Entities.

Thus, an agreement within the meaning of antimonopoly legislation may be recognized as an arrangement in any form, which may be evidenced by information contained in the documents of Economic Entities, as well as coordinated and purposeful actions (omissions) of these entities that consciously make their behavior dependent on the behavior of other market participants.

To establish the fact of concluding an anti-competitive agreement, the Antimonopoly Authority must prove the following set of circumstances:

• The fact of reaching (concluding) an agreement between competing Economic Entities;
• The presence of consequences in the form of decreasing, maintaining, or increasing prices at auctions, or the possibility of such consequences, or alternatively, other consequences provided for by law;
• A causal link between the specific actions of the participants in the agreement and the negative consequences for the market or the potential for such consequences.

Identification of Prohibited Monopolistic Activity

To identify prohibited monopolistic activity, it is necessary to analyze the state of competition in the market where the potential violation occurred. Clause 1.3 of the Procedure for Conducting Analysis of the State of Competition in the Commodity Market provides for the relevant stages of the analysis and the specifics of conducting analysis for certain categories of cases. [5] In accordance with this clause, the main stages of conducting an analysis of the state of competition in the commodity market are:

a) Defining the time interval of the commodity market research;

b) Defining the product boundaries of the commodity market;

c) Defining the geographical boundaries of the commodity market;

d) Determining the composition of Economic Entities operating in the commodity market as sellers and buyers;

e) Calculating the volume of the commodity market and the market shares of Economic Entities;

f) Determining the level of concentration of the commodity market; g) Determining barriers to entry into the commodity market;

h) Establishing the dominant position (if any) of an Economic Entity (Economic Entities);

i) Assessing the state of competition in the commodity market;

j) Preparing an analytical report.

The analysis of the state of competition in the commodity market must be carried out in the sequence specified by the Procedure, as the quality of the implementation of subsequent stages directly depends on the implementation of the previous ones. Failure to follow this sequence or the omission of any of the listed stages may lead to incorrect conclusions regarding the boundaries of the commodity market or the state of competition therein, and consequently, may serve as a basis for recognizing the analytical report as non-compliant with the Procedure. The Presidium of the Supreme Arbitration Court of the Russian Federation, in its Resolution No. 1162/13 dated July 30, 2013, noted the impermissibility of excluding any stages of analysis when considering cases of antimonopoly violations. [6]

Methodology for Identifying Cartel Collusion

In accordance with Clause 18, Article 4 of the Law on Protection of Competition, an agreement is an arrangement in written form contained in a document or several documents, as well as an arrangement in oral form. Thus, the Law on Protection of Competition contains a broader concept of an agreement, not limited to agreements in the form of a civil law contract.

At the same time, anti-competitive agreements are offenses and are therefore not subject to assessment in terms of compliance with the requirements imposed by civil law legislation on the form of contracts (transactions). Consequently, failure to comply with the form of a civil law contract cannot be interpreted as evidence of the absence of an impermissible agreement under antimonopoly legislation.

In accordance with Part 2, Article 11 of the Law on Protection of Competition, "vertical" agreements are prohibited between Economic Entities (except for "vertical" agreements recognized as permissible in accordance with Article 12 of the Law on Protection of Competition) if:

1. Such agreements lead or may lead to the establishment of the resale price of a product, except where the seller establishes a maximum resale price for the buyer;
2. Such agreements provide for an obligation on the part of the buyer not to sell products of an Economic Entity that is a competitor of the seller. This prohibition does not apply to agreements on the organization of product sales by the buyer under a trade name or other means of individualization of the seller or manufacturer.

Agreements between Economic Entities that are participants in the wholesale and/or retail electricity (capacity) markets, commercial infrastructure organizations, technological infrastructure organizations, or grid organizations are also prohibited if such agreements lead to price manipulation in the wholesale and/or retail electricity (capacity) markets.

Direct and indirect evidence may be used to prove anti-competitive agreements and concerted actions. Direct evidence of an anti-competitive agreement may include written evidence containing the will of persons aimed at reaching an agreement: the agreements themselves; contracts in written form; minutes of meetings; and correspondence between the participants, including in electronic form. The fact of concluding an anti-competitive agreement may be established both on the basis of direct evidence and a set of indirect evidence.

In practice, such indirect evidence usually includes:

• The lack of economic justification for the behavior of one of the participants in the agreement, which creates advantages for another participant and does not correspond to the goal of entrepreneurial activity — obtaining profit;
• The conclusion of a supply (subcontract) agreement by the winner of an auction with one of the auction participants who refused to take active part in the auction itself;
• The use of the same IP address (account) by auction participants when submitting applications and participating in electronic auctions;
• The actual location of the participants in the agreement at the same address;
• The registration of electronic digital signature certificates in the name of the same individual;
• The preparation of documents for participation in auctions for different Economic Entities by the same person;
• The existence of mutual settlements between the participants in the agreement, indicating mutual interest in the result of the agreement's implementation. [7]

In particular, if it is established that the societies' participation in competitive procedures was a formal imitation of competition — since if only one such application were admitted, the auction would be declared invalid — the behavior of the commercial organizations will be recognized as non-compliant with the Competition Law, as it contradicts the meaning of auctions aimed at identifying the most favorable price offers from participants intending to conclude a contract. The actions of the Economic Entities were initially coordinated and determined for the purpose of concluding a state contract at the highest possible price.[8]

Another method for obtaining evidence is the conduct of inspections by the Antimonopoly Authority. Inspections are conducted to monitor compliance with antimonopoly legislation. Antimonopoly authorities conduct scheduled and unscheduled inspections in the form of on-site and desk audits. Based on the results of the inspection, an inspection report is drawn up in two copies, one of which is handed to or sent by registered mail with acknowledgment of receipt to the person under inspection or their representative.

The inspection report specifies circumstances relevant to the inspection and signs of antimonopoly violations. The inspection report is one of the pieces of evidence in a case concerning an antimonopoly violation. A mandatory element to be proven when establishing cartel collusion or concerted actions is the fact that the participants in the competition-restricting agreement obtained an economic benefit.[9]

When proving the existence of a monopoly or monopoly collusion, materials from pre-investigation checks and criminal case materials may be used. According to Clause 9 of the Review of Judicial Practice on issues arising during the consideration of cases on the protection of competition and cases on administrative offenses in the specified sphere (approved by the Presidium of the Supreme Court of the Russian Federation on March 16, 2016), materials (copies of materials) from criminal cases may be used as evidence in cartel cases regardless of whether a verdict has been reached in the criminal case, since antimonopoly proceedings establish the presence or absence of an antimonopoly violation rather than the commission of a crime or the guilt of a person.

For example, in a specific case, a resolution to terminate a criminal case was used as evidence, as it contained a detailed transcript of audio recordings of telephone conversations between monitored subscribers. The resolution included information on the subscribers' phone numbers and transcripts of the conversations. [10] The transcript of telephone conversations, along with the phone numbers of the monitored subscribers, allows for the identification of the persons involved in negotiations regarding the outcome of the auctions. The respondent's argument that the resolution to terminate the criminal case confirmed the absence of a cartel was deemed untenable, as the criminal case against an unidentified person for a crime under Part 1, Article 178 of the Criminal Code of the Russian Federation was terminated due to the expiration of the statute of limitations for criminal prosecution. A distinctive feature of competition-restricting concerted actions is their justification as a model of group behavior, where the achievement of a goal by an individual participant is possible only through the complex role-based behavior of the entire collective of Economic Entities acting in concert. Furthermore, the entry of Economic Entities into an agreement implies predictable individual behavior of formally independent entities, determining the purpose of their actions and the reason for each choosing a model of behavior. [11]

Administrative and Legal Protection against a Monopolist

This method of protection against monopolistic activity includes the possibility of initiating both an antimonopoly violation case and an administrative offense case.

The consideration of antimonopoly violation cases is regulated by Chapter 9 of the Law No. 135-FZ, and the Antimonopoly Authority may issue the following documents as response measures:

• A decision on an antimonopoly violation;
• An injunction to eliminate the committed violations.

Upon a complaint from interested persons, an antimonopoly violation case may be initiated, which may result in the establishment of a violation in the actions of the Economic Entities.

Based on the results of the complaint consideration, the Antimonopoly Authority may issue a decision:

• Establishing a violation by a person of legislative requirements regarding the abuse of a dominant position; [12]
• Establishing a violation by a person of requirements regarding the conclusion of cartel agreements. [13]

Administrative liability for monopolistic actions is established by Articles 14.31 of the CAO RF (abuse of a dominant position), 14.31.1 of the CAO RF (abuse of a dominant position by an Economic Entity whose market share for a specific product is less than 35 percent), and 14.32 of the CAO RF (conclusion of a competition-restricting agreement, implementation of competition-restricting concerted actions, or coordination of economic activity).

Amount of Fines

1. Fixed-Amount Fine:

• In cases of abuse of a dominant position where the actions of an Economic Entity (not a natural monopoly entity) lead or may lead to the infringement of the interests of other persons, and the result of such actions is not and cannot be the prevention, restriction, or elimination of competition;
• In cases of abuse of a dominant position by a dominant entity whose market share for a specific product is less than 35 percent.

2. Calculated Fine (a "Revenue-Based Fine" or "Turnover-Based Fine"):

• In cases of abuse of a dominant position by a natural monopoly entity or another Economic Entity if the result of its actions is or may be the prevention, restriction, or elimination of competition;
• Upon the conclusion of an impermissible agreement or the implementation of impermissible concerted actions by an Economic Entity;
• In cases of impermissible coordination of economic activity.

Fines can reach significant amounts. For example, in 2018, the largest fine amounted to 200 million rubles. [14]

Administrative liability for officials for monopolistic actions is fixed but involves an additional sanction — disqualification. Administrative liability can be imposed only on a specific Economic Entity that has abused its dominant position and its official, provided the following conditions exist in aggregate:

• The Economic Entity holds a dominant position;
• The entity specifically committed an act (omission) that leads or may lead to negative consequences such as the prevention, restriction, or elimination of competition or the infringement of the interests of other persons in the sphere of entrepreneurial activity or an indefinite circle of consumers;
• There is an objective link between such dominant position, the act (omission), and the specified consequences (or the possibility of their occurrence).

By virtue of the note to Article 14.32 of the CAO RF, a person who voluntarily reports to the Antimonopoly Authority the conclusion of an agreement impermissible under antimonopoly legislation or the implementation of concerted actions impermissible under antimonopoly legislation shall be exempt from administrative liability for administrative offenses. [15]

Judicial Procedure for Protection against Monopolists

Within the framework of judicial protection, one can distinguish disputes related to challenging the decisions and injunctions of antimonopoly authorities. In this case, disputes will be considered under the rules of Chapter 24 of the APC RF. Additionally, disputes may be considered in general litigation:

• Lawsuits for the restoration of violated rights, compensation for damages (including Lost Profits), and compensation for damage caused to property;
• Lawsuits with requirements to compel the conclusion of a contract;
• Lawsuits to recognize a contract as invalid and apply the consequences of invalidity;
• Lawsuits to recognize the actions of a right holder as an act of Unfair Competition.

Persons whose rights have been violated as a result of non-compliance with antimonopoly legislation by other participants in civil circulation are entitled to bring such claims.

The Law on Protection of Competition does not state that the protection of civil rights in an administrative procedure (through the consideration of antimonopoly violation cases by the Antimonopoly Authority) is excluded if there is a possibility to go to court, or conversely, that it is a mandatory condition for persons whose rights are violated to go to court. Consequently, if a person applies to a court for the protection of their rights without first filing a corresponding application with the Antimonopoly Authority, the court cannot leave such an application without consideration.[16]

Persons entitled to compensation for damages caused by an antimonopoly violation include Economic Entities operating in the relevant commodity market (competitors of the violator), counterparties of the violator, and end consumers — specifically, persons who are not direct buyers of the product at an inflated price.

When considering a case for compensation for damages caused by an antimonopoly violation, in addition to the fact of the violation of the Law on Protection of Competition, the court must establish that the respondent is the person whose actions (omission) caused the damages, establish the facts of the violation of an obligation or the causing of harm, and establish the presence of damages: Actual Damage and Lost Profits (e.g., caused by the loss of clients).

The amount of damages caused by an antimonopoly violation may be determined by comparing prices before, during, and/or after the violation; analyzing financial result indicators (profitability in the industry); or using other market analysis tools, including its structure. The choice of the method for determining the amount of damages depends on the type of violation committed. Actual Damage may include, in particular, expenses incurred by the plaintiff in connection with the violator's imposition of unfavorable contract terms or refusal to conclude a contract, or the difference between the inflated price of the product and the price paid by other counterparties of the violator under similar contracts.

The fact that an Economic Entity — the victim — passed on all or part of the costs arising from the antimonopoly violation (e.g., an inflated price for a resale product) to buyers does not in itself mean that it did not suffer damages as a result of the violation. In such a case, the difference between the inflated price paid by the Economic Entity and the costs passed on to the buyers is subject to compensation.

A lawsuit cannot be denied due to the impossibility of establishing the exact amount of damages. When determining the amount of damages, the clarifications of FAS Russia should be used.[17]

When determining the statute of limitations for cases involving the recovery of damages, it should be considered that the running of the statute of limitations for a lawsuit for compensation for damages is suspended for the period established by the Law on Protection of Competition for the consideration of an application regarding a violation of antimonopoly legislation in an administrative procedure. From the date of the expiration of the specified periods or from the date the Antimonopoly Authority issues a decision — if such a decision is issued before the expiration of the period established by law — the running of the statute of limitations continues.

Lawsuits for compensation for damages may be considered by an Arbitration Court or a court of general jurisdiction under the rules for the protection of the rights and interests of a group of persons. The victim must prove that the violator committed a specific anti-competitive action or failed to perform an action required of it in accordance with antimonopoly legislation (committed an omission), concluded an agreement, or adopted an act that contradicts the Law on Protection of Competition.

The existence of a decision by the Antimonopoly Authority confirming an antimonopoly violation is not a mandatory requirement for satisfying a lawsuit for the recovery of damages. However, an analysis of law enforcement practice shows that in almost all cases, lawsuits for the recovery of damages (as well as for the recovery of unjust enrichment) are initiated after the Antimonopoly Authority issues a decision on an antimonopoly violation. This approach undoubtedly strengthens the plaintiff's legal position, as the fact of the antimonopoly violation will be confirmed by a decision of a competent authority.

Decisions in antimonopoly violation cases, as well as other documents containing the written positions of antimonopoly authorities, are accepted by courts as important evidence in cases for the recovery of damages. [18]

Compulsory Divestiture of a Company for Monopolistic Activity

In cases of systematic monopolistic activity by a commercial organization occupying a dominant position, as well as by a non-profit organization conducting income-generating activity, a court — upon a lawsuit by the Antimonopoly Authority — is entitled to adopt a decision on the compulsory divestiture of such organizations or a decision on the spin-off of one or several organizations from their structure. Organizations created as a result of compulsory divestiture cannot belong to the same group of persons.

A court decision on the compulsory divestiture of a commercial organization or the spin-off of one or several commercial organizations from a commercial organization is adopted if the following conditions are met in aggregate:

1. There is a possibility of separating the structural units of the commercial organization;
2. There is no technologically determined interconnection between the structural units of the commercial organization (in particular, thirty percent or less of the total volume of products manufactured, works performed, or services rendered by a structural unit is consumed by other structural units of that commercial organization);
3. There is a possibility of independent activity in the relevant commodity market for the legal entities created as a result of the reorganization.

Courts are quite cautious in implementing the possibility of compulsory divestiture. In a specific case, a court, in denying a request for the compulsory divestiture of a company, pointed out the following:

• There was no data regarding the abuse of a dominant position;
• There was a violation of housing legislation provisions regarding the granting of the right to change the management company of a residential building to the general meeting (the lawsuit was filed regarding the compulsory reorganization of a management company). [19]

The law enforcement practice of compulsory divestiture or reorganization is limited and usually relates to the impermissibility of one company combining several types of activities for which a legislative prohibition on combination has been established. If it can be proven in court that there is no such combination, compulsory divestiture or reorganization will be denied. For example, in a specific case, the court noted that according to Article 6 of Federal Law No. 36-FZ dated March 26, 2003, On the Specifics of the Functioning of the Electric Power Industry..., a subject of the electric power industry is prohibited from combining two types of activities: (a) natural monopoly activity (transmission and operational dispatch control of electricity) and (b) competitive activity (production and purchase/sale of electricity). The purpose of this restriction is to prevent organizations-monopolists from abusing their position in the relevant commodity market and to observe the interests of electricity consumers. Having analyzed the above legal norms, the court established that the company did not conduct activities in transmission and operational dispatch control in the power industry; therefore, all the necessary conditions listed in Article 6 of Law No. 36-FZ that serve as a basis for the Antimonopoly Authority to adopt a decision on the reorganization of an Economic Entity were absent. [20]

Thus, the types of monopolistic activity, as well as the methods of combating them, are diverse. At the same time, when protecting themselves against illegal monopoly actions, a person whose rights are violated must take an active position in choosing methods of protection to restore their rights.

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References

[1] Clause 8 of the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 2 dated March 4, 2021, On Certain Issues Arising in Connection with the Application of Antimonopoly Legislation by Courts.

[2] Clause 7 of the Review of Judicial Practice on issues arising during the consideration of cases on the protection of competition and cases on administrative offenses in the specified sphere (approved by the Presidium of the Supreme Court of the Russian Federation on March 16, 2016).

[3] Clarification No. 15 of the Federal Antimonopoly Service, On imposing liability for abuse of a dominant position by Economic Entities recognized as collectively dominant (approved by the Protocol of the Presidium of FAS Russia No. 11 dated October 24, 2018).

[4] Clarification No. 5 of the Presidium of FAS Russia, Assessment of the permissibility of business conduct methods by entities occupying a dominant position in the market (approved by the Protocol of the Presidium of FAS Russia No. 4 dated February 24, 2016).

[5] Order of FAS Russia No. 220 dated April 28, 2010, On Approval of the Procedure for Conducting Analysis of the State of Competition in the Commodity Market (registered with the Ministry of Justice of Russia on August 2, 2010, No. 18026).

[6] Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation No. 1162/13 dated July 30, 2013, regarding case No. A03-1338/2012.

[7] Clarification No. 3 of the Presidium of the Federal Antimonopoly Service, Proving impermissible agreements (including cartels) and concerted actions in commodity markets, including at auctions (approved by the Protocol of the Presidium of the Federal Antimonopoly Service No. 3 dated February 17, 2016).

[8] Resolution of the Arbitration Court of the North Caucasus District No. F08-9238/2020 dated November 5, 2020, regarding case No. A53-42595/2019.

[9] Ruling of the Supreme Arbitration Court of the Russian Federation No. VAS-8816/14 dated July 22, 2014.

[10] Resolution of the Thirteenth Arbitration Appellate Court No. 13AP-42282/2021 dated February 18, 2022, regarding case No. A42-1133/2020.

[11] Resolution of the Arbitration Court of the Volga District No. F06-9332/2021 dated October 6, 2021, regarding case No. A06-4411/2020.

[12] Resolution of the Arbitration Court of the West Siberian District No. F04-6269/2016 dated January 11, 2017, regarding case No. A27-6054/2016.

[13] Resolution of the Arbitration Court of the North-Western District No. F07-15755/2019 dated January 29, 2020, regarding case No. A56-35272/2019.

[14] Andrey Tenishev: Damage from cartel collusion amounts to 2% of GDP // Website of FAS Russia. July 3, 2018, 16:25.

[15] Clause 10 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 30 dated June 30, 2008, On Certain Issues Arising in Connection with the Application of Antimonopoly Legislation by Arbitration Courts.

[16] Clause 61 of the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 2 dated March 4, 2021, On Certain Issues Arising in Connection with the Application of Antimonopoly Legislation by Courts.

[17] Clarification of the Presidium of FAS Russia No. 11 dated October 11, 2017, On determining the amount of damages caused as a result of an antimonopoly violation (approved by the Protocol of the Presidium of FAS Russia No. 20 dated October 11, 2017).

[18] Clarification of the Presidium of FAS Russia No. 11 dated October 11, 2017, On determining the amount of damages caused as a result of an antimonopoly violation (approved by the Protocol of the Presidium of FAS Russia No. 20 dated October 11, 2017).

[19] Resolution of the Eleventh Arbitration Appellate Court No. 11AP-9249/2015 dated September 22, 2015, regarding case No. A65-383/2015; Resolution of the Fourteenth Arbitration Appellate Court dated September 23, 2008, No. A44-300/2008.