Metal traders turned out to be intractable – Newspaper Kommersant No. 185 (7386) dated 10/06/2022

Metal traders were able to prove in court that they did not enter into a cartel agreement for steel supplies last year. The court found that the relationship between traders is not competitive, but is vertical in nature. This means that one company buys metal from manufacturers, while others buy it from it. If the court decision is not successfully challenged, the fine of 1.8 billion rubles imposed on traders will be cancelled.

The Federal Antimonopoly Service (FAS) lost the case to large metal traders in the court of appeal, which it found guilty last year of anti-competitive collusion to maintain high prices at the auctions of metal products, follows from the data of the arbitration court. The fine for cartel conspiracy previously amounted to a total of 1.77 billion rubles.

The lawsuit was filed by traders A Group, the Steel Industrial Company, Uralmetallstroy, the Procurement and Supply Department, Kraso, the Rolled Metal Service Center, and Stroytekhtsentr. They asked to invalidate the order of the FAS on the termination of the anti-competitive agreement by metal traders. The court found that traders are not “competitive economic entities”. Directly from Arcelor Mittal, Evraz, Severstal, TMK, OMK, MMK and NLMK, only the Steel Industrial Company buys metal, from which other traders already buy metal. “That is, these companies do not operate in the same commodity market,” the court concluded. In his opinion, such contractual relations should be considered vertical, so the FAS’s assertion of competition between traders is unfounded. Verticality explains the coincidence of IP addresses, accounts when submitting various documents. FAS considered this a sign of anti-competitive collusion.

In the end, the court overturned the order. The FAS told Kommersant that the decision of the appellate instance in the case against large metal traders of the Russian Federation would be appealed. “The FAS will file a cassation appeal, after which the court will set a date for a new consideration of the case,” the service said.

The rise in steel prices served as a pretext for increasing the tax burden on the metallurgical industry. In addition, the FAS filed several cases last year related to rising steel prices. In addition to traders, the regulator suspected Severstal, NLMK and MMK of overpricing metal products. The head of the Federal Antimonopoly Service, Maxim Shaskolsky, said in June of this year that metallurgists were challenging the order to serve in the courts. “The case continues. MMK, Severstal and NLMK, in our opinion, violated the law by setting monopoly high prices for their products. The companies were ordered to stop the abuse of their dominant position and take actions aimed at ensuring competition and saturating the domestic market. Now these orders are being challenged, judicial work is underway, but in any case, we are obliged to fine the companies, there are no other options, ”he told Interfax.

Anastasia Kayukova, Senior Associate in the Antimonopoly and Regulatory Practice of VEGAS LEX, says that the practice of courts to cancel the decisions of the FAS Russia is quite rare, especially in large and well-known cases, and antimonopoly litigation is rightfully considered one of the most difficult areas in judicial practice. According to Ms. Kayukova, if the decision of the Court of Appeal is not subsequently challenged, the fine imposed by the FAS Russia will be subject to cancellation.

At the same time, there are precedents for the cancellation by the court of large fines imposed by the FAS. Thus, in 2018, the Supreme Court canceled a fine of 9.7 billion rubles imposed in 2017 by the FAS on NCSP for anti-competitive overpricing, upholding the decision of three lower courts that the FAS had incorrectly defined the boundaries of the market (see “Kommersant” from December 26, 2018). “T plus” in September in the first instance successfully challenged the decision of the FAS on a fine of 846.5 million rubles. for manipulating prices in the energy market.

Evgeny Zainullin