At a recent meeting, the Presidium of the Federal Antimonopoly Service of Russia (“FAS”) adopted Clarification No. 3 of 17 February 2016 (the “Clarification”), concerning methods for proving anticompetitive agreements, including cartels, and inadmissible concerted actions.
In the first part of the Clarification, the FAS explains what should be understood as anticompetitive agreements. The Clarification states that the concept of “agreement” is broader than the concept of “civil” contract, and failure to observe the form of a civil contract does not, therefore, serve as evidence that no anticompetitive agreement exists. Apart from this, the first part of the Clarification is devoted to describing the provisions of article 11 of Federal Law No. 135-FZ of 26 July 2006 on Protection of Competition (the “Law”) and contains no new conclusions from an enforcement standpoint.
The second part of the Clarification deals with inadmissible concerted actions, described in Article 11.1 of the Law. Citing article 8 of the Law, the FAS emphasizes that concerted actions are characterized by a lack of an agreement between business entities. At the same time, the FAS distinguishes three required characteristics of concerted actions:
- the outcome of the actions is of interest to each entity taking the actions;
- the entities are aware of one another’s actions;
- the actions of some business entities are prompted by the actions of other business entities.
The Clarification makes the important qualification that concerted actions cannot be prompted by circumstances that operate on all business entities equally. These include, for example, such circumstances as a change in prices for raw materials, changes in prices for goods on world markets, or a material change in demand.
In court practice uncertainty remains with regard to the demarcation of the elements of these violations, and similar actions in similar circumstances are sometimes characterized differently by antimonopoly authorities.
The third section of the Clarification deals directly with the methods for proving inadmissible agreements and concerted actions. Building on existing court practice, the FAS emphasizes that both of these violations can be proved by direct evidence, but also by the totality of indirect (circumstantial) evidence.
The FAS understands direct evidence of an anticompetitive agreement to mean written evidence demonstrating the will of the entities to reach an agreement: agreements directly; written contracts; minutes of meetings; correspondence between the parties to the agreement, including correspondence in electronic form.
Indirect evidence of an agreement, according to the FAS, includes, for example, a lack of an economic justification for behavior of one party to the agreement that creates an advantage for another party and is not aimed at generating profit. Another example of indirect evidence of an inadmissible agreement can be the fact that the parties to the agreement are in actuality located at the same address. Note that one item of indirect evidence is insufficient for a violation to be regarded as proved; a combination of such evidence is required.
The FAS concludes with a discussion of the ways that evidence of inadmissible agreements or concerted actions can be gathered, such as through analyses of the state of competition, inspections by the FAS, examination of documents and items, and demands for information from an entity under review.
On the whole, the Clarification contains no positions that are new or previously unknown to court practice, and it can be regarded as a review of the current state of affairs in proving the existence of anticompetitive agreements and concerted actions.