FEDERAL ANTI-MONOPOLY SERVICE

1. FEDERAL ANTI-MONOPOLY SERVICE Interplay between the level of cartel fines and remedies awarded in the context of private enforcement in Russia Tatiana Vyazmina Deputy head of the 4 th division of the Anticartel Department of the FAS Russia

2. Subsumption(Federal law) Federal law “On Protection of Competition” (135-FZ) Article 11. Prohibition of Agreements Restricting Competition between Economic Entities Part 1. The following shall be admited as a cartel and prohibited agreements between undertakings – competitors, i.e. between undertakings which effect a sale on the singlecommodities market if such agreements lead or might lead to: 1) fixing or maintenance of prices (tariffs), discounts, murkups (surcharges) and (or) extra charges; 2) price increase, decrease or maintenance at auctions (bid rigging); 3) share the goods market on a territorial basis, the volume of sales or purchases of commodities, the range of sold products or composition of sellers or purchasers (customers); 4) reduction or cutting off the production of commodities; 5) contracts abandonment with certain sellers or purchasers (customers). 2

3. Subsumption (Administrative code) The Code of the Russian Federation on Administrative Violations(195-FZ) Article 14.32. Conclusion of competition restricting agreements, implementation of competition-restricting concerted actions, coordination of economic activity Part 1. Conclusion inadmissible agreements by economic entityin accordance with the antimonopoly legislation of the Russian Federationas well as participation in it or implementation of competition-restricting concerted actions by economic entity in accordance with the antimonopoly legislation of the Russian Federation – it is punishable by imposition of an administrative fine on officials from twenty thousand to fifty thousand roubles or disqualification for a period of up to three years; for legal entities – from one hundredth to fifteen hundredth of the amount of revenue of the offender gained from selling goods (works, services) on the market where the administrative violation was committed, or the amount of goods (works, services) expenditures of the offender on the market where the administrative violation was committed, or from one tenth to one half of initial cost of the subject of an auction, but not less thanone hundred thousand roubles, and in case, if the amount of revenue of the offender gained from selling goods (works, services) on the market where the administrative violation was committed exceeds 75 percents of cumulative income of the offender gained from selling goods (works, services) or administrative violation is committed on goods (work, services) market and realization of them is conducted under regulated prices (tariffs) in accordance with the legislation of the Russian Federation, –in the amount from three thousandth to three hundredth of the amount of revenue of the offender from selling goods (works, services) on the market where the administrative violation was committed, or the amount of goods (works, services) expenditures of the offender on the market where the administrative violation was committed, but not less thanone hundred thousand roubles. 3

4. Subsumption(federal law) Federal law “On Protection of Competition” (135-FZ) Article 37. Responsibility for violation of the antimonopoly law Part 3. The persons, whose right have been infringedby a breach of the antimonopoly law, have a right to appeal with claims to the court in accordance with established procedure, arbitration court, including claims for redress of infringed rights, compensation of losses, including missed profit,compensation for harm caused to property. 4

5. Subsumption(CIvil code) The Civil Code of the Russian Federation(part 1) (51-FZ) Article 15. Compensation of losses Part 1. The person, whose right has been violated, shall be entitled to demand the full recovery of the losses inflicted upon him, unless the recovery of losses in a smaller amount has been stipulated by the law or by the agreement. Part 2. Under the losses shall be understood the expenses, which the person, whose right has been violated, made or will have to make to restore the violated right, the loss or the damage done to his property (the compensatory damage), and also the undeceived profits, which this person would have derived under the ordinary conditions of the civil turnover, if his right were not violated (the missed profit). If the person, who has violated the right, has derived profits as a result of this, the person, whose right has been violated, shall have the right to claim, alongside with the compensation of his other losses, also the compensation of the missed profit in the amount not less than such profit. 5

6. Legal Liability For violation of antimonopoly legislation there are three types of legal responsibility: 1. Administrative liability. It is imposed most of all sanctions of administrative character on the companies and officials. 2. Criminal liability (Article 178 of Criminal Code of Russian Federation. Restriction of the competition). The number of criminal cases is small. 3. Civil liability. 6

7. Administrative liability (sanctions) When calculating the fine the FAS Russia takes into account circumstances mitigating and aggravating administrative responsibility. According to the item 6 part 1 article 4.2 of the Administrative Code one of mitigating circumstance is voluntary compensation by the person who committed an administrative offence the inflicted damage or voluntary elimination of the caused harm. According to the part 4 article 14.31 of the Administrative Codein the presence of circumstances provided in the item 6 part 1 article 4.2 of the Administrative Code the administrative fine is imposed on the legal entity in size of the minimum amount of the administrative fine imposed for feasance of the administrative offence, i.e. 1% (not less than 100 thousand roubles) of the amount of the revenue/expenditures of the offender gained from selling/acquisition goods (works, services) on the market where the administrative violation was committed. 7

8. Criminal liability According to the general provision of the Criminal Code – the item k) part 1 article 61 of the Criminal Code (Circumstances mitigating punishment) – mitigating circumstance is voluntary compensation of material and moral damages incurred in result of crime, other actions aimed smoothing the harm caused to the victim. According to thespecial provision of the Criminal Code – the Explanatory note 3 of the article 178 of the Criminal Code (Restricting of the competition) – the person who committed an offense under the article 178 of the Criminal Code is exempted from criminal liability if he is the first among accomplices of a crime who voluntary reported about this crime, actively assisted its disclosure and (or) investigation, redressed the damage done by this crime or in a different way smoothed over an inflict harm, and if his actions do not contain other corpus delicti. 8

9. Civil Liability According to the article 37 of the Federal law “On Protection of Competition” and the article 15 of the Civil code persons affected by price-fixing arrangement might demand compensation of losses from cartel participants. In order to getsome of their money back, the consumer should be sure that FAS Russia revealed price-fixing collusion of suppliers (made a decision) and the court had confirmed the fact of collusion. Then the purchaser of goods and service has to file a lawsuit to the court, enclosing a check or contract with the unconscientious company(documentary evidence) and the decision of the FAS Russia. In each judicial case it is necessary to define the fact of infliction of harm and the fair compensation. 9

10. THANK YOU FOR YOUR ATTENTION ! 10