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What is the general attitude of business and the authorities to competition compliance?
Business and the authorities have a positive attitude to competition compliance.
Leading Russian companies, especially those that are market dominant, conduct antitrust audits of their business practices and implement antitrust compliance programmes.
The Russian competition authority - the Federal Antimonopoly Service (FAS) - encourages the compliance efforts of companies. It has developed a bill introducing antitrust compliance to Russian law (the Bill). If adopted, the Bill will officially acknowledge antitrust compliance programmes. Adoption of such a programme will be considered a mitigating circumstance and would decrease the fine for an antitrust violation. For certain companies (eg, state corporations, natural monopolies, legal entities with state participation exceeding 50 per cent) adoption of antitrust compliance policies will be mandatory.
FAS also mentioned at public conferences that effective antitrust compliance programmes would shift liability for antritrust violations from a company to an individual engaged in illegal conduct.
Government compliance programmes
Is there a government-approved standard for compliance programmes in your jurisdiction?
Currently there is no government-approved standard for compliance programmes in Russia.
According to the Bill, antitrust compliance programmes will have to include:
- requirements to antitrust risks assessment;
- measures aimed at the mitigation of antitrust risks;
- control measures over functioning of antitrust compliance programme;
- procedures to familiarise employees with antitrust compliance policy; and
- information about the antitrust compliance officer.
Applicability of compliance programmes
Is the compliance guidance generally applicable or do best practice and obligations depend on a company’s size and the sector of the economy it operates in?
The Bill provides generally applicable compliance guidance for all companies regardless of their size and the sector of the economy in which they operate. However, the government approved special compliance guidelines for companies engaged in state military procurement in April 2017.
If the company has a competition compliance programme in place, does it have any effect on sanctions?
If the company has a competition compliance programme in place it may claim that it is not guilty of an antitrust violation and should not be subject to administrative liability. This possibility is provided by article 2.1 of the Administrative Offences Code, which states that a legal entity is guilty of a violation if it had an opportunity to comply with the law but did not take all possible measures to do it. However, implementation and enforcement of a competition compliance programme has to be proven; the mere existence of a competition compliance programme may not be sufficient.
As mentioned in question 1, if the Bill is adopted, implementation of antitrust compliance programme, provided that it was done before the antitrust violation was committed and the antitrust violation was terminated before an antitrust case was commenced, will serve as a mitigating circumstance and will reduce the turnover fine imposed for an antitrust violation.
Implementing a competition compliance programme
Commitment to competition compliance
How does the company demonstrate its commitment to competition compliance?
Under the current practice, the company demonstrates its commitment to competition compliance by adopting an antitrust compliance policy, appointing an antitrust compliance officer and conducting antitrust compliance trainings for its employees. The company may also disclose its adoption of antitrust compliance programme and related policy on its website and show FAS.
What are the key features of a compliance programme regarding risk identification?
In the absence of statutory regulation, based on the current practice the key features of a compliance programme regarding risk identification are:
- identification of applicable antitrust laws (eg, antitrust laws of jurisdictions of incorporation and activity);
- analysis of the provisions of applicable antitrust laws;
- identification of the markets where the company operates and assessment of its market shares; and
- identification of the company’s operations subject to antitrust risks and related risks.
What are the key features of a compliance programme regarding risk assessment?
In the absence of statutory regulation, based on current practice the key features of a compliance programme regarding risk assessment are:
- assessment of risks’ probability based, in particular, on the level of antitrust regulatory focus on specific types of conduct or industries, market exposure to certain risks, interaction with competitors, etc;
- assessment of risks’ impact, including reputational damages, administrative fines on the company and its officers, disqualification of officers and their criminal liability, claims for damages and invalidation of anticompetitive transactions, disruption of business activities, etc; and
- periodical reassessment of risks, in particular, in response to any changes in the company’s business (eg, launch of new business lines).
What are the key features of a compliance programme regarding risk mitigation?
In the absence of statutory regulation, based on current practice the key features of a compliance programme regarding risk mitigation are:
- a description in the antitrust compliance policy of the main antitrust prohibitions and requirements applicable to the company’s operations;
- the provision of guidelines for employees on antitrust-sensitive conduct;
- the appointment of an antitrust compliance officer;
- arranging for regular antitrust compliance trainings for employees; and
- an anonymous 24/7 hotline for urgent reporting of potential or actual violations of antitrust laws.
Compliance programme review
What are the key features of a compliance programme regarding review?
In the absence of statutory regulation, based on the current practice the key features of a compliance programme regarding review are:
- a review of effectiveness of compliance processes and controls by monitoring whether the individual behaviour of employees meets process requirements (eg, tracking attendance of antitrust compliance trainings), checking whether procedures required for proper functioning of compliance programme are established (eg, procedure for receipt of antitrust compliance officer approval for certain behaviour) and rendering audit reviews of compliance processes and controls;
- substantive assessment of antitrust compliance of business practices by selective ‘deep dives’ into certain lines of business, including document review and interviews with key employees, or by comprehensive audit of the company’s compliance with antitrust laws; and
- an adjustment of the antitrust compliance programme on the basis of the review results.
Dealings with competitors
Arrangements to avoid
What types of arrangements should the company avoid entering into with its competitors?
The company should avoid the following arrangements with competitors:
- Agreements that are prohibited per se, that is, cartels. According to Federal Law No. 135-FZ on Protection of Competition dated 26 July 2006 (the Competition Law) cartels are arrangements for price-fixing; price-fixing at tenders; market allocation by territory, sales or purchase volumes, assortment of sold goods or composition of sellers or purchasers of goods; reduction or termination of production; or refusal to deal with certain sellers or customers.
- Other agreements may be considered unlawful if they lead or may lead to restriction of competition. These agreements include, in particular, arrangements on imposition of contractual conditions unprofitable for a counterparty or not relating to the subject matter of the contract; price discrimination; creation of hurdles for entry to the market or exit from the market; or on determination of conditions for participation in professional and other associations.
What precautions can be taken to manage competition law risk when the company enters into an arrangement with a competitor?
The following precautions can be taken to manage competition law risk when the company enters into an arrangement with a competitor: pre-review of any arrangement with competitor by the person responsible for antitrust compliance (antitrust compliance officer); antitrust compliance training of the employees to be involved in the implementation of this arrangement; control over information exchange in such an arrangement; and prior clearance of an arrangement with FAS.
What form must behaviour take to constitute a cartel?
A cartel does not require written form of an agreement. Concerted actions are sufficient. Unsuccessful attempts to conclude a cartel do not constitute a violation under the Competition Law.
Under what circumstances can cartels be exempted from sanctions?
As a general rule, cartels cannot be deemed permissible under Russian law. The only exception is made for joint venture agreements. FAS clarified in August 2013 that joint venture agreements are defined as Russian or foreign law-governed agreements between commercial entities, including agreements that contemplate the creation of a new legal entity or the joint participation of the parties in an existing legal entity, as well as other agreements providing for joint activity by the parties and contemplating that the parties to such agreement will combine their resources to achieve the goals of the joint activity or will make joint investments for the purposes of achieving the goals of the joint activity and will jointly bear the risks associated with the joint activity, and that information on the joint activity or the creation of the joint venture is public knowledge.
Joint venture agreements may be deemed permissible if they collectively meet the following conditions:
- they do not provide an opportunity to certain entities to eliminate competition in the relevant market;
- they do not impose limitations on their participants or third parties that do not correspond to the purpose of the joint venture agreement;
- they result or may result in the enhancement of production and sale of goods or promotion of technical and economic progress or compatibility of Russian goods on the global market; and
- they provide or may provide benefits to buyers comparable to the benefits of the parties to such agreements.
A company may apply to FAS for prior clearance of its joint venture agreements, which may be deemed permissible under the Competition Law. Such agreements cleared by FAS cannot be qualified as cartels.
Joint venture agreements between competitors in respect of joint activity in Russia require mandatory prior antitrust clearance if the total balance sheet value of the assets of the parties to the agreement and their group companies exceeds seven billion roubles as of the last reporting date or the total worldwide revenue of the parties to the agreement and their group companies for the previous calendar year exceeds 10 billion roubles.
Can the company exchange information with its competitors?
Information exchange between competitors is not explicitly regulated or prohibited in general. It becomes prohibited if it influences an independent determination of individual commercial policies of competitors and thus leads to concerted anticompetitive actions.
The law does not provide for the list of competitively sensitive information. Customarily it can be information on:
- markets and customers allocation: territorial restrictions, allocation of customers, etc;
- pricing, including: price changes, discounts, rebates and costs; and
- production: production strategy and plans.
Cartel leniency programmes
Is a leniency programme available to companies or individuals who participate in a cartel in your jurisdiction?
A leniency programme is available for companies participating in cartels in Russia.
A company will be exempt from liability for cartel if it is the first to satisfy all of the following conditions:
- it voluntarily reported to FAS about the cartel;
- at the moment of such report FAS did not know about the cartel;
- the company stopped its participation in the cartel; and
- the documents and information submitted to FAS by the company are sufficient to prove the existence of the cartel.
A company will pay a minimal fine for participation in a cartel if it is the second or the third to satisfy all of the following conditions:
- it voluntarily reported to FAS about the cartel;
- it admitted its participation in the cartel;
- it stopped its participation in the cartel;
- the documents and information submitted to FAS by the company are sufficient to establish existence of the cartel; and
- the company did not arrange the cartel.
Leniency programmes for companies are applicable not only to cartels but to other unlawful agreements (see questions 10 and 19). Self-reporting about other antitrust violations (eg, abuse of dominance, unfair competition) may serve as a mitigating circumstance in determining a fine.
FAS is not required to keep the name of the applicant confidential.
Can the company apply for leniency for itself and its individual officers and employees?
A company can apply for leniency only for itself. However, its individual officers and employees may be exempted from criminal liability for a cartel if they were the first to:
- voluntarily report the crime;
- actively assist in its discovery or investigation; and
- compensate for damage caused by the crime.
There are no similar rules for exemption from imposition of administrative fines on or disqualification of officers or employees (if applicable).
Can the company reserve a place in line before a formal leniency application is ready?
A company cannot reserve a place in line before a formal leniency application is ready as in this case not all conditions for leniency would be satisfied (see question 15).
However, FAS mentioned at some conferences that it intended to develop respective mechanisms for leniency applications.
If the company blows the whistle on other cartels, can it get any benefit?
Generally, blowing the whistle on other cartels does not give any benefits.
Dealing with commercial partners (suppliers and customers)
What types of vertical arrangements between the company and its suppliers or customers are subject to competition enforcement?
The following vertical arrangements between the company and its suppliers or customers are subject to competition enforcement:
- Vertical agreements prohibited per se: agreements that lead or may lead to resale price maintenance (except for maintenance of maximum resale price) and agreements under which a customer undertakes not to sell goods from the seller’s competitor (this prohibition does not apply to agreements on sale of goods under a trademark of a seller or a manufacturer).
- Vertical agreements that may be considered unlawful if they lead or may lead to restriction of competition. These agreements include, in particular, arrangements on imposition of contractual conditions unprofitable for a counterparty or not relating to the subject matter of the agreement; price discrimination; creation of hurdles for entry to the market or exit from the market for other business entities; or on determination of conditions for participation in professional and other associations.
Agency agreement is not qualified as a vertical agreement.
Would the regulatory authority consider the above vertical arrangements per se illegal? If not, how do they analyse and decide on these arrangements?
Agreements that lead or may lead to resale price maintenance (except for maintenance of maximum resale price) and agreements that a customer undertakes not to sell goods of the seller’s competitor are considered per se illegal. Other vertical agreements follow the ‘rule of reason’ test and are unlawful if they lead or may lead to restriction of competition.
Under what circumstances can vertical arrangements be exempted from sanctions?
Vertical arrangements can be exempted from sanctions if:
- they are franchising agreements concluded in written form;
- the shares of each of its parties (except for financial entities) on the market of goods that are the subject matter of the vertical agreement do not exceed 20 per cent;
- permissibility conditions described in question 13 are met; or
- respective agreements are permissible subject to General Exemptions in respect of Agreements between Sellers and Customers approved by Governmental Decree No. 583 dated 16 July 2009. According to this document agreements are permissible if the seller sells goods to two or more customers and its market share is less than 35 per cent or sells goods to a single customer whose market share is less than 35 per cent; a seller and a customer do not compete with each other or compete on the market where a customer purchases goods for their further resale; and a customer does not produce substitutes to the goods being subject matter of the agreement.
How to behave as a market dominant player
Determining dominant market position
Which factors does your jurisdiction apply to determine if the company holds a dominant market position?
The main factor that determines dominance is the market share of a business entity:
- a business entity with market share exceeding 50 per cent is considered dominant, unless FAS determines that the business entity is not dominant on the respective market, regardless of its market share; and
- a business entity with market share not exceeding 50 per cent is not considered dominant per se. To establish its dominance FAS needs to prove additional circumstances, eg, stability of its market share, its relation to market shares of its competitors, possibility for new competitors to enter the market.
If market share of a business entity does not exceed 35 per cent, as a general rule, it cannot be found dominant.
Abuse of dominance
If the company holds a dominant market position, what forms of behaviour constitute abuse of market dominance? Describe any recent cases.
Abuse of dominance is defined as acts (or omission) of a dominant entity that result or may result in prevention, elimination or restriction of competition or infringement of rights of other business entities in the sphere of their entrepreneurial activities or indefinite range of consumers.
The list of acts (or acts of omission) qualified as abuse of dominance is not exhaustive, but the Competition Law names certain violations considered as abuse of dominance per se. Such acts include, in particular:
- any fixing of monopoly high or monopoly low prices;
- any withdrawal of goods from circulation if it resulted in increase of prices for such goods;
- any imposition of contractual conditions unprofitable for a counterparty or not related to subject matter of an agreement;
- any economically or technologically unjustified reduction or termination of production of goods;
- any economically or technologically unjustified refusal to contract with certain customers;
- any economically, technologically or otherwise unjustified setting of different prices for the same goods;
- any fixing of unreasonably high or low prices for a financial service;
- creating hurdles for access to the market or withdrawal from the market to other business entities;
- any breach of regulatory prescribed pricing rules; and
- any manipulation of prices on wholesale or retail markets of electricity energy (capacity).
The most recent high-profile abuse of dominance case is the case against Google considered and decided by FAS and courts in 2015-2016. Google was found to be dominant on the market of application stores for Android OS. It abused dominance by prohibiting manufacturers of Android OS smartphones from pre-installation of applications competing with applications from the Google Mobile Services (GMS) package. Google’s abusive practices included coupling Google Play application stores with other applications of the GMS package, compulsory pre-installation of Google search as the default search, preferential placement of Google applications on the home page and prohibition of pre-installation of competing software on smartphones. As a result Google was fined 438,067,400 roubles and required to, inter alia, introduce the necessary amendments to its agreements with smartphone manufacturers.
Under what circumstances can abusing market dominance be exempted from sanctions or excluded from enforcement?
Acts (or acts of omission) constituting an abuse of dominance may be deemed permissible if they meet the conditions described in question 13. However, this defence cannot be used for certain types of abuse of dominance, including price-fixing, withdrawal of goods from circulation, imposition of unprofitable contract terms on a counterparty, unjustified refusal to contract with certain counterparties, setting different prices for the same goods, price-fixing for financial services, and a breach of regulatory prescribed pricing.
Competition compliance in mergers and acquisitions
Competition authority approval
Does the company need to obtain approval from the competition authority for mergers and acquisitions? Is it mandatory or voluntary to obtain approval before completion?
It is mandatory to obtain FAS approval before completion of the merger or acquisition if the following thresholds are met.
Pre-closing consent shall be obtained in the following cases:
- acquisition by a person (or group of persons) of voting shares in a Russian joint-stock company where such person (or group of persons) acquires the right in respect of more than 25 per cent (or more than 50 per cent or more than 75 per cent) of the voting shares in the Russian joint-stock company;
- acquisition by a person (or group of persons) of participatory interests in a Russian limited liability company where such person (or group of persons) acquires the right in respect of more than one third (or more than half or more than two-thirds) of the participatory interests in the Russian limited liability company;
- acquisition by a person (or group of persons) of title to or right of possession in respect of fixed assets located in Russia (other than land plots, non-industrial premises, uncompleted construction) or intangible assets of a legal entity, if the value of such assets exceeds 20 per cent of the balance sheet value of the fixed assets and intangible assets of the transferring legal entity (for financial companies - if the value of assets exceeds 10 per cent of the balance sheet value of assets);
- acquisition by a person (or group of persons) under one or a set of transactions (eg, under a trust management agreement, agency agreement, cooperation agreement, etc) of the right to determine terms and conditions for carrying out business activities of a company registered in Russia, or the right to exercise its CEO’s powers (among other things, as a managing company); or
- acquisition by a person (or group of persons) of more than 50 per cent of voting shares or participation interests in a company registered outside Russia or other rights to determine terms and conditions for carrying out its business activities or the right to exercise its CEO’s powers (provided that such foreign entity supplied goods to the Russian territory in the amount exceeding one billion roubles within the year preceding the date of a notifiable transaction).
- the aggregate balance sheet value of the assets (worldwide) of the purchaser and its group of persons and the target company and its group of persons exceeds seven billion roubles as of the latest reporting (balance sheet) date or their aggregate revenue for the last calendar year exceeds 10 billion roubles; and
- the balance sheet value of the target company’s and its group of persons’ assets (worldwide) exceeds 400 million roubles as of the latest reporting (balance sheet) date.
In determining the amount of the aggregate balance sheet value of assets of the purchaser and its group of persons and the target and its group of persons, one should exclude the assets of the seller of shares of (participation interests in or rights in respect to) the target and its group of persons, if, as a result of the transaction, the seller and its group of persons forfeit the right to determine terms and conditions for carrying out business activities of the target.
Financial entities (depends on the type of licence obtained by the target)
- banks: balance sheet value of assets of the target bank exceeds 31 billion roubles;
- insurance companies (except for medical insurance companies): balance sheet value of assets of target insurance company exceeds 200 million roubles;
- insurance companies (medical insurance companies): balance sheet value of assets of target insurance company exceeds 100 million roubles;
- leasing companies: balance sheet value of assets of assets of target leasing company exceeds three billion roubles;
- non-state pension funds: balance sheet value of assets of target non-state pension fund exceeds two billion roubles;
- stock exchanges: balance sheet value of assets of target stock exchange exceeds one billion roubles;
- mutual insurance entities, credit consumer cooperatives: balance sheet value of assets of target mutual insurance entity, credit consumer cooperative exceeds 500 million roubles; or
- microfinance organisations: balance sheet value of assets of target microfinance organisation exceeds three billion roubles.
Establishment and merger of legal entities
Pre-closing consent shall be obtained in the following cases:
- establishment of a commercial legal entity, the share capital of which is paid with shares (participatory interests) or fixed or intangible assets of another commercial legal entity (other than financial) (based on, inter alia, a transfer act), in respect of which the newly established legal entity receives any of the rights specified in ‘Acquisitions’ (see above) provided that filing criteria set out there are met;
- establishment of a commercial legal entity, the share capital of which is paid with share (participatory interests) or assets (other than financial) of financial company in case the balance sheet value of assets of financial company exceeds the amount set up by the government (see above); or
- merger of companies, provided that the aggregate balance sheet value of the assets (worldwide) of the merger parties and their groups of persons exceeds seven billion roubles as of the latest reporting (balance sheet) date or their aggregate revenue for the last calendar year exceed 10 billion roubles or with respect to financial entities the thresholds indicated above are exceeded.
A proposed transaction or other action does not require pre-closing consent of FAS if it meets the requirements specified under ‘Acquisitions’ or ‘Establishment and merger of legal entities’ (see above) and either of the following applies:
- one of the parties to the proposed transaction or other action owns more than 50 per cent of voting shares (participation interests) in another party; or
- the proposed transaction (or other action) occurs within the same group of people and the list of people that make up the group has been filed with FAS not more than one month prior to the implementation of the proposed transaction (or other action) and has not changed as of the date of the transaction (or other action) (this transaction triggers post-closing filing); or
- the proposed transaction or other action is prescribed by acts of the government or the President.
An acquirer carries the onus for obtaining the approval for acquisition. The parties participating in establishment and merger bear the burden for obtaining the approval for respective acts.
How long does it normally take to obtain approval?
FAS considers merger filings in 30 days since submission of the application. This term may be extended by two months.
If the company obtains approval, does it mean the authority has confirmed the terms in the documents will be considered compliant with competition law?
If the company obtains FAS approval for a transaction it does not mean that the terms in the documents are in compliance with the Competition Law as FAS reviews only drafts of transaction documents and evaluates how the transaction as a whole will influence competition. Clearance of antitrust compliance of the terms in the documents follows a separate procedure and is voluntary.
Failure to file
What are the consequences for failure to file, delay in filing and incomplete filing? Have there been any recent cases?
Failure to file, delay in filing and incomplete filing may lead to FAS’s claim to court for liquidation or reorganisation of a company established as a result of a merger or for invalidation of a transaction on acquisition of interest in a company if such acts led or may lead to the restriction of competition.
Besides, entities who fail to file for antitrust clearance in due terms may be subject to administrative liability consisting of a fine up to 500,000 roubles for companies and up to 20,000 roubles for company officers. However, these are not frequently enforced by FAS.
Investigation and settlement
Under which circumstances would the company and its officers or employees need separate legal representation? Do the authorities require separate legal representation during certain types of investigations?
The company and officers or employees need separate legal representation if their interests contradict each other or if they are involved in separate administrative or criminal proceedings. The authorities do not require separate legal representation during certain types of investigations.
For what types of infringement would the regulatory authority launch a dawn raid? Are there any specific procedural rules for dawn raids?
The FAS may launch a dawn raid for any type of antitrust infringements.
A dawn raid can be scheduled based on materials coming from law enforcement or other state authorities and showing signs of an antitrust violation; reports and applications of individuals, legal entities and mass media reports showing the signs of an antitrust violation; expiry of the time period for execution of an earlier issued FAS compliance order; instructions of the President and the government; and FAS detecting the signs of an antitrust violation.
Chapter 6 of the Competition Law establishes specific procedural rules for dawn raids. According to these rules FAS must warn a business entity in 24 hours prior the start of a dawn raid, except for dawn raids connected with suspicions in cartel activities. In the latter case notification about the coming inspection is prohibited. The total duration of a dawn raid shall not exceed one month. In exceptional cases this term may be extended by two months.
During a dawn raid FAS officers may, upon producing their official identification cards and the FAS inspection order, enter freely into various types of governmental bodies, commercial and non-profit organisations (except for an individual’s property) in order to obtain the necessary documents and information and examine visually areas, premises (except for a dwelling of an individual), documents and articles of the inspected entity in the presence of at least two attesting witnesses. During such examination they are entitled to carry out photographing, filming and videotaping, make copies of documents and of electronic media. If required, they may engage qualified experts in the course of examination.
FAS officers may request documents and information from the inspected entity as well as materials made in the form of a digital or electronic record that are necessary for inspection purposes (including commercial and other secrets), copy and make extracts from such documents, materials and information and, if necessary, review the originals. In addition, FAS officers may request oral or written explanations on matters related to the dawn raid.
What are the company’s rights and obligations during a dawn raid?
During the dawn raid the company has a right to:
- be familiarised with administrative regulations governing an inspection prior to its commencement and receive full information related to the inspection, its scope and subject matter, as well as related documents;
- be present during the inspection and give explanations;
- request a copy of an inspection report with annexes, confirm the inspection results reflected in the inspection report or state its objections to the inspection report or separate acts of the FAS officers;
- exercise its rights directly or through a representative;
- appeal against the results of an inspection in FAS or in court; and
- receive compensation for the damages caused by FAS officers’ unlawful acts, including for lost profits.
The company must not create obstacles for access of FAS officers to its premises and provide documents and information per the FAS officers’ request.
Is there any mechanism to settle, or to make commitments to regulators, during an investigation?
Generally, a case cannot be settled during an investigation. However, in case of certain forms of abuse of dominance (ie, the imposition of contractual conditions unprofitable for a counterparty or not related to the subject matter of an agreement, an economically or technologically unjustified refusal to contract with certain customers; an economically, technologically or otherwise unjustified setting of different prices for the same goods; discrimination) and unfair competition, FAS may issue a warning order to a company before commencement of an antitrust case. If the company fulfils the warning order, FAS will not commence an antitrust case for this violation.
What weight will the authorities place on companies implementing or amending a compliance programme in settlement negotiations?
FAS will view it as a positive development, which may make settlement negotiations easier.
Are corporate monitorships used in your jurisdiction?
Corporate monitorships are not used in Russia.
Statements of facts
Are agreed statements of facts in a settlement with the authorities automatically admissible as evidence in actions for private damages, including class actions or representative claims?
FAS decision on antitrust case can serve as evidence in private antitrust litigation.
Invoking legal privilege
Can the company or an individual invoke legal privilege or privilege against self-incrimination in an investigation?
Legal privilege covers any information (in oral or written form) obtained by an attorney from his or her client in the course of advising his or her client or vice versa (attorney-client privilege). An attorney cannot give witness statements with respect to the facts he or she has become aware of in the course of providing legal services to a client. Evidence obtained by legal counsel not registered as an attorney, such as in-house counsel, is not privileged.
Privilege against self-incrimination is not available during FAS investigations.
What confidentiality protection is afforded to the company or individual involved in competition investigations?
The company or individual must provide FAS with all documents and information related to the subject matter of the investigation, including those constituting their commercial secrets. FAS has to keep this information confidential. In addition, a participant of FAS investigation may apply for consideration of the case in a closed hearing if it is required to protect its commercial secrets. FAS may also decide to carry out a closed hearing per its own initiative.
Refusal to cooperate
What are the penalties for refusing to cooperate with the authorities in an investigation?
Failure to provide documents or information to FAS in due terms may lead to administrative liability consisting in a fine up to 500,000 roubles for companies and up to 15,000 roubles for company officers. The creation of any other obstacles to FAS investigation may lead to administrative liability consisting in a fine up to 50,000 roubles for companies and up to 10,000 roubles for company officers.
Is there a duty to notify the regulator of competition infringements?
There is no duty to notify the regulator of competition infringements.
What are the limitation periods for competition infringements?
The statutory limitation period for competition infringements constitutes three years since their commitment, or, if the infringement is continuous, since its termination or revelation. Continuous infringement is a failure to comply with the law over a lengthy period of time.
Are there any other regulated anticompetitive practices not mentioned above? Provide details.
The Competition Law prohibits unfair competition. Unfair competition includes any acts of business entities aimed at obtaining business benefits that contradict Russian legislation, business customs, principles of good faith, reasonableness and fairness and that have caused or may cause losses of competitors or damaged or may damage their business reputation. Unfair competition covers the following practices, though this list is not exhaustive:
- false comparison;
- unfair competition related to improper use of IP;
- confusion; and
- illegal acquisition, use and disclosure of commercial information.
In addition, the Competition Law prohibits certain anticompetitive practices of state authorities, such as the adoption of regulations eliminating or restricting competition (eg, those discriminating against certain companies), the conclusion of anticompetitive agreements among each other or with companies, anticompetitive practices at tenders (eg, coordination of behaviour of participants of a tender), and provision of state and municipal preferences without FAS consent, etc.
Are there any proposals for competition law reform in your jurisdiction? If yes, what effects will it have on the company’s compliance?
See question 1. In addition, FAS plans to remove the limitation that antitrust prohibitions do not apply to the exercise of rights over IP and to agreements in respect of IP. If adopted, an unjustified refusal to conclude a licence agreement or reduction or termination of production of goods with use of the respective IP (eg, a patent) may be considered as abuse of dominance. Compulsory licences can be used as a remedy.