Analytics Law Review

Anti-competitive practices are specified in the Federal Law No. 135-FZ "On Protection of Competition in the Russian Federation" dated July 26^th, 2006 (the Law on Protection of Competition). According to the Law on Protection of Competition, the following activities are forbidden in Russia for market participants:

• abuse of dominant position (Article 10);

• anticompetitive agreements and concerted actions (Articles 11, 11.1, and 16);

• unfair competition (Chapter 2.1, Articles 14.1-14.8).

Abuse of dominant position means that companies with a significant market share (generally more than 35% of the relevant market) are not allowed to perform actions that lead to limiting competition or impairing others’ rights. Examples of forbidden actions are provided in Article 10(1) of the Law on Protection of Competition and include, inter alia, monopolistically high or monopolistically low prices, offering unprofitable terms to business partners, discrimination, unreasonable refusal to enter into a contract, etc.

According to Article 14.31 of the Russian Code of Administrative Offences (the Code), administrative fines for abuse of dominant position for the company may vary from RUB 300,000 to 15% of the liable company’s annual revenue on the relevant market, depending on the consequences of the wrongdoing.

You can find out more information about abuse of dominant position in our article entitled "The Concept of Dominant Position in Russian Antitrust Law".

Anticompetitive agreements and concerted actions include several different violations. Among them are, inter alia, cartel agreements, illegal "vertical" agreements (agreements between the seller and the buyer that contain terms restricting competition), coordinating commercial activities, concerted actions, and agreements with governmental authorities.

The scope of liability for anticompetitive agreements depends on the type of violation and the ensuing consequences. Administrative fines may reach 15% of the liable company’s annual revenue on the relevant market. In addition, the Russian Criminal Code (Article 178) provides for criminal liability for company's management that is responsible for entering a cartel agreement. Criminal proceedings may be initiated against particular person(s) in case a significant amount of damage results, or if the company received significant revenues while benefiting from its wrongdoing.

Unfair competition means all actions that (1) are aimed at obtaining advantages while conducting business; (2) violate Russian law, business practices, or the requirements of respectability, reasonableness, and equity; (3) can cause, or are likely to cause, damage to other market players’ businesses, or can cause, or are likely to cause, damage to their reputations. Chapter 2.1 of the Law on Protection of Competition contains a list of unacceptable practices, which includes the unlawful usage of intellectual property, discrediting behavior, misleading conduct, inappropriate comparison, etc. The list is not exhaustive. Any activity that falls within criteria provided by the definition of unfair competition may be considered as a violation.

The scope of liability for unfair competition is stated in Article 14.33 of the Code. In general, the amount of an administrative fine for the company varies from RUB 100,000 to RUB 500,000. However, if the company sells goods that involve the illegal use of intellectual property, the fine can reach 15% of the liable company’s annual revenue on the relevant market.

You can find out more information about unfair competition in our article entitled "Unfair competition in Russia".