FAS finds it challenging to cooperate with counterpart antitrust agencies

20.11.2013

Andrey Tsyganov, deputy head of the Russia's antitrust agency, the Federal Antimonopoly Service (FAS), told PaRR that cooperation with the European Commission (EC) as well as with other competition authorities is challenging because they are hesitant to exchange confidential information.

The head of FAS Igor Artemyev has called for increased cooperation between FAS and other competition authorities, especially in cartel investigations, as previously reported by PaRR.

Between 2009 and 2012, FAS signed eight agreements or memoranda of understanding (MoU), including with competition authorities in Mexico, Hungary, Austria, Italy, Spain, Serbia, as well as a multilateral treaty with Belarus and Kazakhstan. On the basis of these agreements, the Russian regulator can cooperate with its counterparts on antitrust investigations. The multilateral treaty with Belarus and Kazakhstan would also allow the exchange of confidential information, but it has not been approved yet, noted Tsyganov.

The MoU between FAS and the EC, signed in 2011, does not oblige the parties to exchange of confidential information, said Vitaly Dianov, a competition lawyer at Goltsblat BLP, the Russian practice of London-based law firm Berwin Leighton Paisner LLP. For this reason it is not an effective mechanism to facilitate such investigations, like the EC probe into Gazprom, he added.

According to the MoU “the sides acknowledge that it will be in their common interest to exchange non-confidential information, experience and views with regard to competition policy development and case investigations on violation of competition legislation that will be of mutual interest to the sides”.

The EC opened formal proceedings against Gazprom regarding possible market division, unfair pricing practices and other anticompetitive behaviour in Central and Eastern Europe. In September 2011, the EC conducted dawn raids at the premises of affiliates of Gazprom. Europe’s competition watchdog is  preparing  a formal list of charges, the so-called statement of objections, to the Russian gas giant.

In September 2012 the Russian president issued a decree which stipulates that companies regarded as strategic by the Russian state can only provide information to foreign regulators with prior government permission, as previously reported.
The MoU between FAS and EC cannot override the president decree as the MoU is not to be “considered as an international treaty and does not establish or purport to establish any legal rights or obligations”.

Information leaks from FAS are not uncommon, claimed Aleksey Ulianov, co-chairman of the National Union for the protection of consumer rights (National Union) and a member of a competition working group of the expert council under Russia’s government, who actively campaigns against amendments to Russian’s competition law proposed by FAS.
But FAS is not aware of any such leaks, Tsyganov told PaRR. There were no cases of FAS officials being accused of and held liable for confidential information disclosure, he added.

Because no information leaks were challenged at courts, it is difficult to speculate on this issue, said a Moscow-based competition lawyer. However, he noted that because staff turnover at FAS is high, it is difficult to ensure protection of confidential information.

FAS often requests much information, more than needed to consider a certain case, said Andrey Shastitko, director at the centre for competition and economic regulation studies, the Russian Presidential Academy of National Economy and Public administration. For this reason many companies are hesitant to share information with the regulator, he added.

The Moscow-based competition lawyer echoed this. When investigating a competition violation, FAS appears to be probing the whole sector and looking for other potential violations, he added.

by Natalia Lapotko in London

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