Chronicle
2024: FAS identified a cartel in the Moscow region during the implementation of the Digital Economy national project
The Federal Antimonopoly Service (FAS) of Russia in September 2024 announced the identification of a cartel conspiracy as part of the implementation of the national project "Digital Economy" in the Moscow region. According to the agency, violations were discovered during an auction for the provision of services for organizing printing, copying and scanning processes in state bodies of the Moscow region. The total contract value was ₽71,8 million. If guilt is confirmed, cartel participants face negotiable fines.
According to RIA Novosti, the state government institution of the Moscow Region "Moscow Regional Center for Information and Communication Technologies" and Networks LLC became suspects in anti-competitive actions. These organizations are suspected of concluding and implementing an anti-competitive agreement, which is a violation of competition law. The conspiracy was revealed during the FAS investigation aimed at identifying and suppressing violations in the implementation of state contracts.
The FAS actively uses its latest digital tools to combat cartels, including the Anti-Cartel automated information system (AIS). In May 2024, the service developed a bill on the creation of the state information system (GIS) "Antikartel," which, using elements of artificial intelligence, will carry out an automated analysis of all trade procedures on a daily basis. The new system will allow the FAS to more effectively identify and suppress anti-competitive agreements, as well as ensure budget savings by creating more competitive conditions for state and municipal procurement.
The FAS continues its work to combat cartel agreements within the framework of various national projects. Earlier, in April 2024, the department identified a cartel worth ₽2,8 billion in the implementation of the Demography and Education national projects. Signs of collusion were found at tenders related to design and survey work and the construction of non-residential buildings in Moscow, Primorsky Krai and Khanty-Mansi Autonomous Okrug.[1]
2023
To combat digital monopolies, the FAS has increased the threshold for coordinating transactions between companies
On September 1, 2023, a set of legislative measures (the so-called "fifth antimonopoly package"), aimed at developing competition in digital markets, entered into force in Russia. One of the innovations is the Federal Antimonopoly Service (FAS) will now agree on transactions between companies worth more than 7 billion rubles.
As an example, the FAS press service cites the deal between Yandex.Taxi LLC and Vezet Group of Companies in 2021: in order to protect competition and the interests of citizens, it could be the subject of consideration by the antimonopoly authority due to exceeding the approval threshold with the FAS Russia of 7 billion rubles if this bill was adopted.
The law is also supplemented by a new article that prohibits monopolistic activities for program owners to allow transactions between sellers and buyers electronically. The requirements will apply to dominant digital platforms in the event of their unfair behavior in the market.
FAS previously cited examples of such unfair behavior: unreasonable refusal to access a digital platform, imposing unfavorable conditions for consumers, creating discriminatory conditions for entrepreneurs selling goods on the marketplace.
The criteria for the dominant position for owners of digital platforms using the "network effect" are revenue of more than 2 billion rubles for the last calendar year and the share of transactions in a certain commodity market over 35%.
The requirements will not impede the work of companies, however, if they dominate, they will establish a ban on discrimination against customers and a monopolistically high price for the services provided, the FAS said.
In addition, the concept of "network effect" appears in the law "On Protection of Competition": the property of the commodity market, in which the consumer value of a digital platform that allows transactions between sellers and buyers changes depending on the change in the number of such sellers and buyers.[2]
Putin signed a law to increase punishment for the use of digital algorithms in cartels
Russia Vladimir Putin The president signed a law to increase punishment for the use of digital algorithms in cartels. The corresponding document on the legal information website was published on August 4, 2023.
As the Federal Antimonopoly Service (FAS) of the Russian Federation explains, the law establishes the use of digital algorithms in cartel agreements as an aggravating circumstance in bringing to administrative responsibility. The need for innovation is associated with the increasing use of such algorithms in the conclusion and implementation of anti-competitive agreements, noted in the department.
The document is included in the so-called "fifth antimonopoly package" and recognizes the use of digital algorithms in cartel agreements, namely computer programs that allow you to make decisions and perform actions under such agreements automatically, without human participation, an aggravating circumstance in bringing to administrative responsibility.
According to the explanatory note, computer programs used for illegal purposes lead to the receipt of illegal income and an increase in the amount of damage from the implementation of anti-competitive agreements. At the same time, in the law enforcement practice of recent years, there has been an increase in the number of offenses using computer programs for this purpose.
In addition, the law introduces a doubled administrative fine for repeated failure to comply with the order of the antimonopoly authority. We are talking about cases when the violating company has already been brought to administrative responsibility for not fulfilling such an order and not stopping the violation within the time frame newly established for this.
The FAS believes that the document will increase the effectiveness of antitrust control measures in digital markets, as well as the protection of the rights and interests of market participants from monopolistic activities.
Federal Law on Amendments to the Code of Administrative Offenses of the Russian Federation
In the Voronezh region revealed collusion during the construction of communication lines for 901 million rubles
On March 15, 2023, it became known that the Tushinsky District Court of Moscow would consider the criminal case of a cartel conspiracy at the auction to find a contractor for the construction of communication lines in the Voronezh Region. Read more here.
2022: FAS revealed a cartel in the supply of cameras for fixing traffic violations for 2 billion rubles
The Federal Antimonopoly Service (FAS) of Russia has opened a case of violation of antimonopoly legislation against three companies that allegedly supported high prices at tenders for the supply and lease of complexes for automatic recording of traffic violations and services for the development of intelligent transport systems. The press service of the department announced this in mid-December 2022. Read more here.
2021
FAS opened cartel conspiracy cases against 10 IT companies
On September 6, 2021, the Federal Antimonopoly Service (FAS) of Russia announced the initiation of a case of cartel conspiracy in the IT market. The attention of the department was attracted by the activities of 10 companies engaged in the provision of technical support and information security services .
Cases were initiated against ESLab, Normos XXI, NTC Electron-Service, Krastol and Legion Pro, Alfakom, Main Information Security Center, KSK Technologies, Inter-Technologies and Ancer Pro.
According to the FAS statement, the basis for initiating cases was the information received from the Prosecutor General's Office of the Russian Federation, and during the audit, the FAS revealed signs of concluding and implementing anti-competitive agreements in the actions of these organizations.
According to the FAS, the companies "supported trading prices in the markets for the supply of computer electronic equipment and the provision of consulting, technical support and security services in the field of information technology." The total amount of contracts exceeds 1 billion rubles.
If guilt is established, companies face negotiable fines in accordance with the code on administrative violations of the Russian Federation, the Federal Antimonopoly Service recalled.
FAS often initiates cases against IT sector companies. In 2020 alone, arbitration courts considered at least five cartel cases in this market, says antimonopoly economist Vadim Novikov. However, there were arbitration cases, and this case is part of a new trend: if previously the defendants in cartel cases faced an exclusively fine, now it is also a prison. The trend was started by the verdict of Sergei Shatilo, which the FAS called "indicative and significant," and the verdict also concerned the supply of computer systems, only medical ones, the expert noted.[3]
FAS revealed cartel collusion with the participation of the Ministry of Digital Development of the Novosibirsk Region
On March 9, 2021, the Office of the Federal Antimonopoly Service (FAS) in the Novosibirsk Region announced the disclosure of the cartel during the implementation of the national project "Digital Economy." Read more here.
2020
FAS revealed the cartel in the IT market
The Federal Antimonopoly Service (FAS) has revealed the cartel in the IT market. Its participants fulfilled state contracts for 1 billion rubles. The regulator announced this on December 30, 2020.
CSAiBF LLC, Summit LLC, Integration Solutions LLC, IT Distribution Systems LLC and Service Systems LLC were recognized as violators of antimonopoly legislation. These companies, according to the FAS, having entered into a cartel conspiracy, took part in 13 auctions for the supply of computer equipment and the provision of press outsourcing services for the needs of federal and regional authorities and institutions in 2017-2019.
Companies face fines of up to 50% of the maximum contract price. The FAS will also send the case materials to law enforcement agencies. They will decide whether to initiate a competition restriction case (Article 178 of the Criminal Code of the Russian Federation).
In a conversation with the magazine "Company," lawyer AB "Feoktistov and Partners" Ruslan Dolotov noted that Article 178 of the Criminal Code of the Russian Federation (prohibiting cartels) was radically changed in 2015. After that, 99% of such cases began to be initiated with the filing of the FAS precisely for situations related to state contracts.
The classic scheme of a criminal act for such cases can be described as follows: public procurement participants conclude an oral agreement to maintain a minimum price reduction (a minimum reduction in the contract price when participating in electronic auctions) with the creation of visibility of bidding and competition and jointly determine the outcome of the auction, determining who will be the winner, thereby creating a cartel, he said.
According to antimonopoly economist Vadim Novikov, the FAS often initiates cases against IT companies, only in 2019 the arbitration courts considered at least five cartel cases. However, in 2020, a new trend was outlined in this area: if previously the defendants in cartel cases were threatened exclusively with a fine, now it is also a prison.[4]
Warning of IT companies in Russia about the transfer of business abroad due to the case of the cartel
On July 23, 2020, the Association of Computer and Information Technology Enterprises (APKIT, among its members - 1C, ABBYY, Acer, IBM, Kaspersky Lab, etc.) issued an open letter in which she spoke about the threat of business being taken out of Russian jurisdiction after searches at the National Computer Corporation, as well as at Merlion, Jet Infosystems, Ai-Teko and Maykor in the case of IT-cartel.
 | The competitiveness of a particular jurisdiction depends not only on the size of tax rates and the amount of government grants. No less, but rather more important is business security, investment security, the safety of the entrepreneurs themselves , - says the letter APKIT, a fragment of which is quoted by RBC. |  |
The association said that entrepreneurs now cannot calmly focus on the country's digital transformation, feel insecure about the prospects for their business in Russia and that a favorable business environment can be formed in the country.
It also follows from the letter that the IT industry faced inspections, searches and detentions in cases of five years or more ago, which, according to APKIT participants, could be investigated as part of an administrative or arbitration process.
As the head of APKIT Nikolai Komlev explained to RBC, the position of the members of the association refers not only to the latest case on supplies to the CEC, but also to the previous ones - for example, to the T-Platforms case. In March 2019 , a criminal case was opened against the general director of this company, Vsevolod Opanasenko, due to violations of the contract for the supply of computers to the Ministry of Internal Affairs. If within the framework of these cases, investigators really revealed violations, they need to be investigated, but at the same time there is no need to prevent managers from continuing to do business, Komlev emphasized.[5] cartel case
FAS presented guidelines for identifying digital cartels
In July 2020, the Federal Antimonopoly Service (FAS) of Russia issued guidelines for identifying digital cartels. The document was prepared as part of the implementation of an interdepartmental program of measures to identify and suppress cartels and other agreements restricting competition for 2019-2023, the regulator said in a statement.
The document contains provisions that will help identify signs of digital cartels. The recommendations relate to common types of digital evidence of anti-competitive agreements.
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According to the FAS, methodological recommendations will help qualify illegal actions. To prepare recommendations, the FAS summarized the practice of detecting anti-competitive agreements. They are formed using software. According to the service, this is now necessary, since digital technologies are actively being introduced into the work of business, including in the field of public procurement.
To effectively counter criminal organizations using digital technologies, the Anti-Cartel Administration was created in the structure of the Federal Antimonopoly Service.
As noted in the FAS, in the context of the digitalization of society , the Anti-Cartel Department examines the evolution of the very concept of competition and uses modern methods of antitrust counteraction to commit crimes, taking into account the peculiarities of all information processes, the use of intelligent digital technologies, as well as the use of the global big data system.
According to Anton Teslenko, Deputy Head of the FAS Russia Anti-Cartel Department, methodological recommendations for combating digital cartels have become another step in the department's systematic generalization of practices on the use of various algorithms, robots and programs for the implementation of anti-competitive agreements, as well as in developing approaches to the analysis and assessment of such actions.[6]
2017: FAS found Kraftway guilty of cartel conspiracy in the supply of PC and software to government agencies
On May 22, 2017, the Federal Antimonopoly Service (FAS) announced the recognition of Kraftway and two subsidiaries of the company guilty of cartel conspiracy. The agency checked the supply of computers and software to the Federal Tax Service, the Federal Customs Service and the Pension Fund. Read more here.
The largest cartels in the Russian IT market
2016-2020: Cartel collusion of Aquarius and HP partners in the supply of computers to the Federal Center for Informatization at the CEC of Russia
Notes
- ↑ FAS revealed collusion within the framework of the national project "Digital Economy"
- ↑ Antitrust restrictions for marketplaces and aggregators begin to operate in Russia
- ↑ FAS OPENED TWO CASES IN THE FIELD OF IT-TECHNOLOGIES
- ↑ FAS RUSSIA REVEALED CARTEL COLLUSION IN THE IT SPHERE
- ↑ xtor = AL-% 5Binternal_traffic% 5D--% 5Brss.rbc.ru% 5D-% 5Btop_stories_brief_news% 5D Major IT companies warned of threat due to
- ↑ PUBLISHED GUIDELINES FOR IDENTIFYING CARTELS IN THE DIGITAL ECONOMY
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