MTS and MegaFon may not yet comply with the FAS requirement to reduce tariffs

The Moscow Arbitration Court dismissed the claims MTS and MegaFon on the decision of the Federal Antimonopoly Service (FAS) on fines due to an increase in the cost of services, follows from a message on the official website of the regulator.

In 2022, mobile operators unreasonably increased the cost of cellular services for more than 44.5 million subscribers under the pretext of increasing their own costs, according to the FAS website. The regulator considered that this decision violated the interests of consumers, obliged to return the previous prices for tariffs, and also imposed fines. After that, the operators went to court to appeal the decision, but the court sided with the FAS.

An MTS representative told Vedomosti that the company would decide on further steps after receiving and analyzing the motivational part of the court decision. The representative of “MegaFon” refrained from commenting.

For the first time MTS increased tariffs by an average of 9.5% in January 2022. In August, the operator raised the cost of part of the tariff plans again by an average of 8.4%. The operator raised the remaining tariffs in September and October, thus, the overall rise in the cost of communication services for 28 million subscribers in 2022 amounted to more than 20%, while the consumer price index was 10.5% as of the end of August, follows from the information on the FAS website.

The FAS initiated an antimonopoly case against MegaFon after the operator raised the prices for communication services for more than 16.5 million subscribers by an average of 12% in May 2022.

In April 2022, the FAS, in pursuance of the government’s plan of priority actions to ensure the development of the economy in the face of sanctions, developed recommendations according to which operators can index prices for services to inflation (consumer price index, CPI). If this limit is exceeded, the agency conducts a feasibility study. The same recommendations consolidated the obligation of operators to notify the FAS of planned tariff changes 14 days in advance. If, according to the results of the analysis, the level of tariff changes did not correspond to the growth of the CPI, the FAS had the right to initiate antimonopoly cases.

But at the end of June 2023, during a discussion of the development of the communications industry until 2035 with Prime Minister Mikhail Mishustin, operators, represented by a working group on fixed-line communications, asked to be allowed to raise communications tariffs by 5% above inflation, Kommersant wrote. Market participants believe that the growth of tariffs at this level will make it possible to modernize networks and ensure their stable operation.

When making a decision, the FAS is guided by Part 1 of Art. 14.31 of the Code of Administrative Offenses of the Russian Federation, which provides for liability for actions recognized as abuse of a dominant position and unacceptable in accordance with Russian antimonopoly legislation, if such actions lead or may lead to infringement of the interests of other persons, Sergey Uchitel, partner at the Pen & Paper Bar Association, previously explained to Vedomosti. The maximum fine under this article for legal entities is from 300,000 to 1 million rubles, for officials – from 15,000 to 20,000 rubles, he noted.

The order of the antimonopoly body is mandatory, continues Teacher. For failure to comply with the order, administrative liability is provided in the form of a fine of up to 500,000 rubles, he recalled. In case of repeated failure to fulfill FAS orders, this fine will be doubled, the lawyer added.

But now we are talking only about the decision of the court of first instance, and this implies the possibility of further appeal to higher authorities, said Yury Fedyukin, managing partner of the law firm Enterprise Legal Solutions. This means that even if the courts refuse to satisfy the operators’ demands, until the possibilities for further appeal against decisions that do not meet their interests are exhausted, they are not obliged to comply with the requirements contained in the order, he added.

Vedomosti sent a request to the FAS.