Cartels were sentenced – Newspaper Kommersant No. 235 (7436) dated 12/19/2022

Responsibility for creating cartels and obstructing anti-cartel checks will be tightened. The relevant amendments to the Criminal and Criminal Procedure Codes, as well as to the Code of Administrative Offenses, were adopted by the State Duma on December 15. The Federal Antimonopoly Service (FAS) explains the need for toughening by the fact that cases of collusion account for up to 90% of auction violations. Experts and businesses are not so unambiguous in their assessments – some support the project, pointing to the detrimental effect of cartels on competition in bidding, others point to a decrease in the standards for detecting cartels and the risks from the adoption of amendments for bona fide entrepreneurs.

The draft laws prepared by the Federal Antimonopoly Service and adopted by the State Duma in the first reading toughen responsibility for anticompetitive agreements and concerted actions of market participants. The first draft amends the Criminal Code and the Code of Criminal Procedure and extends the existing criminal liability for concluding a cartel to also include participation in it. At the same time, the maximum term of imprisonment for creating cartels is being increased from three to four years.

Fines remain unchanged – from 300 thousand to 500 thousand rubles. or in the amount of salary or other income for a period of up to two years. But if the cartels led to a change in prices at mandatory auctions, the fines will amount to between 600,000 and 800,000 rubles. The alternative is imprisonment for up to five years or forced labor. For beneficiaries and company management or in case of particularly large damage, the fine will be from 2 million to 4 million rubles. The project doubles the thresholds for large income – up to 100 million rubles, especially large income – up to 500 million rubles, as well as damage thresholds – up to 20 million and 60 million rubles. respectively. At the same time, income in the new wording is recognized as proceeds from the sale of all goods extracted by all cartel participants without deducting expenses.

The second bill, amendments to the Code of Administrative Offenses, introduces fines for obstructing anti-cartel checks. For citizens, it will amount to 15-30 thousand rubles, for officials – 30-50 thousand rubles, for legal entities – from 0.1% to 1% of the total annual revenue, but not less than 50 thousand rubles. Now the ceiling of fines for legal entities is 10 thousand rubles, and if due to such actions it is impossible to conduct or complete an audit – 50 thousand rubles.

The FAS believes that the current fines do not deter the illegal behavior of the audited companies. “Specialists of the department cannot collect the evidence necessary for conducting antitrust investigations,” the service adds.

The need for innovations in the FAS is explained by the fact that bid rigging constitutes the largest part of violations, while bidding was created for the efficient use of budget funds. “The vast majority of anti-competitive agreements that are revealed are concluded precisely at the auction, about 90% of the total,” said Sergei Puzyrevsky, deputy head of the FAS.

Opora Rossii Vice President Dmitry Petrovichev notes that small businesses suffer from cartels no less than the state and consumers. “Cartels are, as a rule, big business or companies affiliated with it,” he said. We note, however, that earlier the FAS massively punished cartels and small businesses that in reality were not able to influence the level of competition (see Kommersant of April 26, 2021). After the change in leadership, the FAS promised to abandon the punitive approach and shift the focus to ensuring economic growth – for this, in particular, the service reduced fines for representatives of SMEs.

Oleg Moskvitin, Acting Director of the HSE Institute for Competition Policy and Market Regulation, acknowledges the current inconsistency of fines for obstructing inspections with the damage caused. “By paying the fine but obstructing the inspection, the company avoids a turnover fine for the cartel itself, which could be proven, and also reduces the possibility of bringing its officials to legal liability (up to criminal) for the cartel,” he explains. At the same time, he points out the need for the FAS to carefully prove such violations when considering administrative cases.

Antimonopoly expert Vadim Novikov warns that the changes do not so much toughen penalties for cartels as they reduce the requirements for proving them, eliminating the requirement to prove the existence of a restriction on competition. “When investigating cartel cases, the FAS does not prove the restriction of competition, this is done by the criminal court. The bill also proposes to remove this element of proof, ”the expert draws attention. In his opinion, raising the thresholds for large income is not essential for practice, since there is a construction of “an attempt to obtain a large income”, and therefore it is possible to attract for lost income.

Diana Galieva