Competition is the rivalry between economic entities. Actions of any enterprise that create obstacles to the participation of other companies in trade turnover are not allowed on the market. Previously, the general procedure for behavior on the market was established by the corresponding normative act No. 948-I "On competition and restriction of monopolistic activities"from 1991. However, due to the changed economic situation, it was canceled. Instead, another one is in force (No. 135 of 2016). Let us consider the features of the application of its provisions.

Restriction of competition

The signs of this phenomenon are provided for in normative act No. 135. How is it characterized restriction of competition? Article 4 of this normative act contains the following features:

1. Reducing the number of economic entities that do not belong to the same group of persons.
2. A decrease or increase in the cost of a product that is not caused by changes in the conditions of circulation of products on the market.
3. Refusal of economic entities not belonging to the same group to act independently.
4. Determination of the general rules of commodity circulation on the market by agreement between participants or on the basis of instructions from one person, or when enterprises coordinate their actions.

In the course of the activities of economic entities, other factors may arise that create the opportunity for any company or several companies to influence the conditions of commodity circulation unilaterally. For example, relevant circumstances may arise during a municipal or state procurement. Restriction of competition in such cases, it is expressed in the establishment by local or state authorities of requirements for economic entities or goods that are not provided for by regulations.

Prohibitions

According to the normative act on competition and restrictions on monopolistic activities, agreements or concerted actions of enterprises on the market are not allowed if they can lead or have caused:

1. Maintaining/establishing tariffs/costs, surcharges, discounts.
2. Reducing, increasing, maintaining prices at auction.
3. Division of the market by sales volume, territorial basis, product range, composition of customers/buyers or sellers.
4. Technologically or economically unjustified refusal to carry out transactions, unless it is expressly established by regulations.
5. Imposing on the counterparty conditions that are unfavorable for him or are not related to the subject of the contract.
6. It is technologically, economically or otherwise not justified to establish different prices for one product.
7. Termination/reduction of production of products for which there is demand or for the supply of which orders have been placed when it is possible to produce them profitably.
8. Creating barriers to entry or exit from the market for other firms.
9. Establishing conditions for participation/membership in professional or other associations, if this leads or may lead to the prevention, elimination, establishment of unreasonable criteria for membership that act as an obstacle to participation in payment or other systems, without which entities competing with each other are unable provide the required financial services.

Methods

Restriction of competition can be done in different ways. The most common methods include:

1. Abuse of dominant position.
2. Drawing up agreements or coordinating actions by enterprises in order to influence the state of the market.

In the first case it is expressed as:

1. Establishing/maintaining high/low cost of production.
2. The removal of a product from circulation, resulting in an increase in its price.
3. Imposing unfavorable terms of a transaction on a counterparty.
4. Unreasonable reduction/termination of production if there is demand for it.
5. Setting unreasonably high prices for financial services provided.
6. Creating a discriminatory environment in the market.
7. Formation of obstacles for other enterprises to access or exit trade turnover.
8. Violation of pricing established by regulations.

Concerted action

Law on Competition and Restriction of Monopoly sphere establishes a ban on the creation of a market situation in which rival firms, without formalizing an agreement to form a cartel, act together. Moreover, the results of such behavior are in the interests of each enterprise if they inform each other about the decisions made. It should be taken into account that actions caused by the same circumstances for firms do not act as a restriction of competition. For example, changes in the cost of products on the world market, regulated taxes/tariffs, and demand for goods.

Illegal agreements

As such, the normative act of the sphere considers contracts in accordance with which:

1. Market participants set certain prices for the purchase or sale of products.
2. The volume of sales and purchases of products is regulated to influence its cost.

Thus, the object of agreements can be:

1. Conditions of implementation.
2. Pricing.
3. Use of patents.
4. Spheres of influence.
5. Regulation of production volume.
6. Coordination of product sales rules.
7. Hiring workers.

Exceptions

In some cases, the rules allow justified restriction of competition. By 223 regulatory act (dated July 18, 2011), it is permitted if it is determined by the real needs of the customer. At the same time, the actions of economic entities should not contradict the Regulations on the acquisition of services, works, and products by individual legal entities.

Difficulties

Thus, the main condition for allowing a restriction of competition is justification. Not a single legal act in force in the country covers this concept. Meanwhile, this question is very important. Its relevance is determined by the fact that any requirement set by the customer will always limit competition, excluding proposals that do not meet it. The issue will be resolved without any particular difficulties if the specifics of the market are such that there are requirements arising from the provisions of the law. For example, they may be related to mandatory licensing, the presence of technical regulations for products, and so on. Problems arise in cases where there are no requirements in regulations.

If we consider the question from a theoretical perspective, the answer to it can be found in Art. 2. In accordance with it, when purchasing services, products, works, customers are guided by constitutional principles, the Civil Code, and other regulations. The latter, in particular, includes the Regulations regulating the procedure for carrying out transactions. It acts as a document regulating procurement requirements, rules for organizing and conducting procedures, execution and execution of contracts and other conditions.

Controversial point

When considering the validity of restrictions on competition, it is necessary to take into account the provisions of regulatory act No. 135. In Art. 17, part 1 establishes a number of prohibitions. In particular, during bidding, request for quotations, proposals, the following are not allowed:

1. Coordination of participants’ activities by organizers/customers.
2. Creating preferential conditions for someone, including by providing access to information, unless otherwise provided by regulatory documents.
3. Violation of the procedure for identifying the winner.
4. Participation of organizers, customers, and their employees in requesting quotations, proposals or bidding.

With a literal interpretation of the above requirements, it becomes clear that it is impossible to establish any requirements for products, participants, or terms of agreements, since any of them will restrict competition.

Solving the issue in practice

As the analysis of arbitration cases shows, courts do not use a literal interpretation of the provisions. At the same time, establishing requirements that do not comply with the Regulations leads to the loss of disputes regarding complaints. For example, this document stipulates that certain conditions are provided only in the case of purchases in excess of any amount. Submitting qualifications below this level will be illegal. In cases considered FAS, restriction of competition used in conjunction with the concept of reasonableness. If the requirement that the customer sets does not arise from the subject of the transaction or the draft contract, if there is a complaint from the counterparty, his actions will most likely be regarded as a violation.

When establishing any requirement, the customer must remain within the limits of the Regulations. He must ensure that no norm is formally violated. If the organization has such local acts as technical policy, and requirements, including quality, follow from it, then it will be easier to prove the validity of the conditions. Experts also recommend coordination with competent structures. They can be a procurement commission or an expert group.

When defining requirements, one should not forget about their “measurability”. There is no unambiguous definition of this concept. However, practice shows that requirements that are either numerical or supported by documents not provided by the customer will be considered measurable. The latter include admission, license, and so on.

Restriction of competition under 44-FZ

Art. 8 of this normative act establishes the principle of competition. The norm guarantees any interested parties the opportunity to participate in procurement. In paragraph 2 of Art. 8 talks about prices. The provisions establish the principle of competitive cost, non-price competition in order to identify the best purchasing conditions. In case of violation of norms, as well as when unreasonable demands are made on participants, or when customers commit actions that contradict federal legal acts, liability is provided.

Cartels

They are considered one of the most dangerous violations of antitrust laws. Cartel collusion is an economic crime. It causes damage to consumers, enterprises, and the entire national economic complex of the country as a whole. Cartels:

1. Lead to market capture by certain entities.
2. Limit competition.
3. They entail the establishment of one cost of production that is obligatory for the parties to the agreement.
4. Suppress external competition (they do not allow companies that are not participating in the agreement to enter the market).
5. They entail the extraction of higher than average income at the expense of consumers.

Prohibitions for authorities

Current legislation does not allow the adoption of acts, commission of inactions/actions by competent authorities, providing for:

1. Introduction of qualifying requirements for the procedure for creating enterprises.
2. Establishment of prohibitions or restrictions on the conduct of certain types of activities or the production of certain types of products.
3. Creation of unreasonable obstacles to the work of companies.
4. Establishing bans or restrictions on the free movement of products across the territory of the Russian Federation, their acquisition, sale, and exchange.
5. Instructions to economic entities on priority deliveries for certain categories of consumers/customers or on signing contracts as a priority.
6. Establishing restrictions on the choice of enterprises for buyers.

Criminal liability

Punishment for restricting competition is established if it caused major damage to organizations, citizens, the state, or allowed the violator of the rules to derive income on a large scale. Sanctions for this act are established by Art. 178 of the Criminal Code. The corpus delicti is considered material. The act will be considered completed if the consequence of the restriction of competition is major damage.

The purpose of the crime is to minimize or completely eliminate the competition of economic entities. A variety of methods for limiting competition can be used. As a rule, real obstacles are created for other economic entities to enter the market or conditions are created under which their participation in trade turnover becomes minimal.

Cases when the property of a municipal settlement may be located on the territory of another municipal settlement. Located within the boundaries of one municipal district, including taking into account Article 50 of the FEDERAL LAW of 06.10.2003 No. 131-FZ.

Answer

This conclusion was reached by the Commission of the Tatarstan OFAS Russia after studying the terms of reference and documentation of the electronic auction on the subject: “Provision of services for refilling cartridges for 2016 for the Almetyevsk PND branch of the State Autonomous Institution “RKPB named after. acad. V.M. Bekhterov".
The Office of the Federal Antimonopoly Service in the Republic of Tajikistan received a complaint from LLC “Management Company “Print Technologies” about the actions of the customer - the State Autonomous Institution “Republican Clinical Psychiatric Hospital named after. Academician V.M. Bekhterev Ministry of Health of the Republic of Tatarstan". According to the applicant, the indication in the documentation of the condition: “Place of provision of services: at the location of the contractor’s premises, Almetyevsk” contradicts the requirements of the Legislation on the contract system, including leading to a restriction of competition.
According to the customer’s explanations, these requirements were determined for the prompt fulfillment of the terms of the government contract for the Almetyevsk branch. However, the OFAS Commission for the Republic of Tatarstan, having studied the relevant documents, determined that the establishment of these requirements for the provision of services limits the number of procurement participants on a territorial basis, since only a few organizations have the opportunity to provide services only in Almetyevsk.
Thus, established by the State Autonomous Institution “Republican Clinical Psychiatric Hospital named after. Academician V.M. Bekhterev Ministry of Health of the Republic of Tatarstan" requirements are unlawful and violate paragraph 1 of part 1 of Article 64 with the reference norm to paragraph 1 of part 1 of Article 33 of the Law on the Contract System, part 4 of Article 8, part 1 of Article 2 of the Procurement Law. Consequently, the complaint of Management Company Print Technologies LLC was recognized by the antimonopoly authority as justified.

Establishing the remaining shelf life as a percentage is not allowed
This position is adhered to when considering cases of violation of the requirements of the current legislation of the Russian Federation on the contract system of the Tatarstan OFAS Russia.
When conducting an electronic auction for the subject: “Supply of food products,” the State Public Institution “Social Shelter for Children and Teenagers “Gavrosh” in the urban district “city of Kazan”, being the customer, indicated the following in the documentation: “Juice - Natural, clarified, in an assortment of 0 ,2 l.; Sliced ​​loaf - In packaging; Rye bread - Packaged; Cupcake - Packaged, 75 gr. The remaining shelf life of the product is at least 80% of the total established shelf life for this product.”
Indeed, in accordance with Part 4 of Article 5 of the Law of the Russian Federation “On the Protection of Consumer Rights” for food products, the manufacturer is obliged to set an expiration date. At the same time, according to Article 190 of the Civil Code of the Russian Federation, the period is determined by a calendar date or the expiration of a period of time, which is calculated in years, months, weeks, days or hours, and not as a percentage.
Thus, customer requirements for the remaining shelf life of food products, expressed as a percentage, may entail the establishment of unequal conditions for food producers, limiting competition and the number of procurement participants, as stated in the letter of the Ministry of Economic Development of the Russian Federation dated September 4, 2015 No.OG-D28-11718.
Taking into account the above, the State Public Institution “Social shelter for children and adolescents “Gavrosh” in the urban district “city of Kazan” was found to have violated the requirements of paragraph 1 of part 1 of Article 33 of the Federal Law “On the contract system in the field of procurement of goods, works, services to meet state and municipal needs " The violator will be issued an order to eliminate violations of the requirements of current legislation.

Two lands - three owners: lands that have rights holders were put up for auction

The other day, the Eleventh Arbitration Court of Appeal supported the position of the Tatarstan OFAS Russia, which issued an order to the MKU “Committee of Land and Property Relations of the Executive Committee of the Municipal Formation of the City of Kazan”.
It should be noted that two citizens filed a complaint with the Office of the Federal Antimonopoly Service for the Republic of Tatarstan against the actions of the auction organizer. In their opinion, the Committee on Land and Property Relations put up for auction land plots that belong to the applicants.
During the consideration of complaints, the auction organizer presented documents for the above-mentioned plots. At the same time, the applicants also presented documents confirming the existence of ownership rights to the plots located in the Konstantinovka residential area. One citizen had in his hands a certificate of ownership of land, perpetual use of land, the other - a state act of ownership, lifelong inheritable possession, perpetual use of land.
Thus, the FAS Commission for the Republic of Tatarstan established the existence of a dispute about the right and copyright holders of these areas. Consequently, the sale of lands before their actual rights holders are identified violates the rights and legitimate interests of the applicants.
Based on the decision made, the auction organizer was issued an order, according to which the Committee on Land and Property Relations had to cancel the protocols and remove the property from the auction. However, the decision and order of the antimonopoly authority were appealed in court. Having concluded that the contested decision of the Federal Antimonopoly Service for the Republic of Tatarstan does not contain conclusions about the presence of violations of antimonopoly legislation in the applicant’s actions with references to specific rules of law, the violation of which was established as a result of the consideration of the case, the court upheld the complaint of the municipal institution.
The appellate court, in turn, noted that one cannot ignore the fact that citizens have appropriate property rights to these plots, and decided to cancel the decision of the Arbitration Court of the Republic of Tatarstan.
Thus, the decision and order of the Tatarstan OFAS Russia were recognized as lawful and subject to execution.

The supply agreement states that we do not have the right to supply products to certain retail chains. Is this legal?

This condition carries risks. As a general rule, limiting the territory of a distributor’s activities by a “vertical” agreement violates Part 4 of Article 11 of Law No. 135-FZ, since this leads to the refusal of business entities that are not part of the same group of persons to act independently in the product market. This is one of the signs of restricting competition. But exceptions to this rule are possible.

Clause 2 of the General Exceptions (Part 1, Part 1, Article 35 of Law No. 135-FZ).

Rationale

Dangerous terms of distribution agreements. Cases when there is a risk of receiving a FAS order

Limitation of distribution territory. As a general rule, limiting the territory of a distributor’s activities by a “vertical” agreement violates Part 4 of Article 11 of Law No. 135-FZ, since this leads to the refusal of business entities that are not part of the same group of persons to act independently in the product market. This is one of the signs of restricting competition. But exceptions to this rule are possible.

Thus, a condition is allowed that prohibits the distributor from selling goods in the territory in which another buyer (distributor) or the manufacturer himself is already selling a similar product (clause 2 of the General Exceptions). This territory must be specified in the contract. But due to the rather large restrictions in the application of the General Exceptions (Part 1, Article 13 of Law No. 135-FZ, Clause 1 of the General Exceptions), if the parties still intend to enter into an agreement establishing a certain territory for the distributor, it is better to contact to the antimonopoly authority with a statement to verify the compliance of the draft agreement with the requirements of the law (Part 1, Article 35 of Law No. 135-FZ). *

Nota bene!

If the agreement contains a provision limiting the territory, then an argument in favor of the absence of a violation of the law may be that the distributor did not actually fulfill this condition, that is, he carried out sales in other territories (decision of the FAS Russia commission dated April 13, 2012 in case No. 111/129 –11, dated 05/31/12 in case No. 111/132–11). *

In addition, territorial restrictions on activities are permissible in licensing agreements (clause 3 of Article 1235 of the Civil Code of the Russian Federation). In practice, situations arise when a manufacturer grants a distributor a non-exclusive license to use trademarks only in connection with the packaging, promotion, distribution and sale of goods in a certain territory. This leads to a limitation of the territory in which the distributor has the right to sell goods. However, it is necessary to take into account that if a result of intellectual activity or a means of individualization transferred under a license agreement is subject to state registration, then the grant of the right to use such a result or such means under a license agreement is also subject to state registration, otherwise it is invalid (Part 2 of Article 1235 of the Civil Code of the Russian Federation ).

Since the sale of products through the dealer network is still most often based on a territorial principle, in cases where there are no grounds for applying exceptions to the ban, manufacturers (suppliers) often try to formally circumvent this ban. In such situations, they do not include in dealer agreements a condition on a specific sales territory for each dealer, as well as a ban on sales in other territories, but informally there are corresponding agreements. It must be borne in mind that if there is evidence that the manufacturer (supplier) is implementing such a policy and actually limiting the territory of the dealer’s activities, this may be considered prohibited coordination of economic activity (Part 5 of Article 11 of Law No. 135-FZ). For example, in one case, the FAS Russia commission came to the appropriate conclusions based on the fact that the territorial zones of each dealer were indicated on the website of the supplier of goods, and also on the basis of proven facts that the supplier sent letters to potential end buyers of products notifying that in a specific territory, they can purchase products only from specific dealers, otherwise he does not guarantee delivery and subsequent maintenance of the products (

1. Monopolistic actions committed by establishing monopoly high or monopolistically low prices, as well as restricting competition by dividing the market, restricting access to the market, eliminating other economic entities from it, establishing or maintaining uniform prices -
shall be punishable by a fine in the amount of two hundred to five hundred times the minimum monthly wage, or in the amount of the wages or other income of the convicted person for a period of two to five months, or by arrest for a term of four to six months, or by imprisonment for a term of up to two years.
2. The same acts, committed repeatedly or by a group of persons by prior conspiracy or by an organized group, -
shall be punishable by a fine in the amount of five hundred to seven hundred times the minimum monthly wage, or in the amount of the wages or other income of the convicted person for a period of five to seven months, or by imprisonment for a term of two to five years.
3. Acts provided for in parts one or two of this article, committed with the use of violence or with the threat of its use, as well as with the destruction or damage of someone else’s property or with the threat of its destruction or damage, in the absence of signs of extortion -
shall be punished by imprisonment for a term of three to seven years with or without confiscation of property.
The crime is expressed in monopolistic actions committed by establishing monopolistically high or monopolistically low prices, or limiting competition by dividing the market, or limiting access to the market, or eliminating other economic entities from the market, as well as establishing or maintaining uniform prices.
Monopolistic actions in accordance with the Law of the Russian Federation of March 22, 1991 with subsequent amendments and additions to the Federal Law of the Russian Federation of May 25, 1995 “On Competition and Restriction of Monopolistic Activities in Product Markets” are such actions of economic entities that contradict the provisions of the antimonopoly legislation, aimed to prevent, restrict or eliminate competition in product markets. Such entities can be individual entrepreneurs, commercial organizations or federal executive authorities, executive authorities of constituent entities of the Russian Federation or local government authorities.
Monopoly high prices for goods are those prices that are set by a person engaged in economic activity in the commodity market for the selfish purpose of obtaining excess profits due to the low quality of goods or for the purpose of monetary compensation for the purchase of goods or other costs.
Monopoly low prices for goods are those prices that are set on the commodity market by the seller in order to oust other competitors from the market through the sale of unprofitable goods or other actions performed for this purpose.
Restriction of competition by dividing the market is expressed in a conspiracy of two or more business entities aimed at dividing the product market either on a territorial basis, by the volume of sales and purchases, securing “retail points” in the market, etc.
Restriction of access to the commodity market, the exclusion of other economic entities from it can be expressed in the prohibition of economic entities from importing goods into the market, and obstacles to the trade of goods by sellers. In addition, the elimination of other economic entities from the market can be expressed in acts of mental or physical violence applied to other entities, or in the perpetration of pogroms of “commodity outlets,” etc.
Establishing or maintaining uniform prices on the commodity market means actions of economic entities aimed at eliminating competitors in the market.
Actions committed repeatedly or by a group of persons by prior conspiracy or by an organized group, as well as with the use of violence or with the threat of its use, as well as with the destruction or damage of someone else’s property or with the threat of its destruction or damage, in the absence of signs of extortion (then there is a culprit does not require the transfer of property when committing this crime).
The subject of the crime is a person who has reached the age of 16 (individual entrepreneur, head of a commercial organization, officials of executive authorities or local governments).