OREANDA-NEWS. May 24, 2010. The Moscow Office of the Federal Antimonopoly Service (the Moscow OFAS Russia) revealed a bid-rigging collusion between "Dmitrovskie Ovoschi" Ltd., "GIGIYEYA" Trading House" Ltd., "Frutovit" Ltd., "Atlantis" Ltd. and "Ditrade" Trading Company" Ltd. at an open auction for government contracts for supply of peeled potatoes and vegetables harvested in 2009 for catering for students of educational institutions in Moscow, reported the press-centre of FAS Russia.

The case was initiated upon a petition of the Moscow City Department on Competition Policy.

Actions of the auction bidders at the open auction for the government contracts did not display any signs of competition, which is confirmed by minimal percentage of reduction of the original lot prices, which is not typical for competitive purchasing.

The original prices went down only by 0.5-1% in contrast to the average 10-15% associated with competitive bidding.

OFAS discovered that the above bidders have contract relations or are affiliated.

Investigating the case file, the Moscow OFAS Russia established that entrepreneurs violated Article 11 of the Federal Law "On Protection of Competition" (prohibiting competition-restricting agreements and concerted actions).

The above auction bidders will be made administratively liable.

"Such actions of bidders eliminate competition at auctions and tenders, so as a consequence they become unimportant", explained Vladimir Yefimov, the Head the Moscow Office of the Federal Antimonopoly Service. "As part of the second antimonopoly policy, FAS Russia introduced criminal liability for such violations (Article 178 of the Criminal Code of the Russian Federation)".

Reference:
Article 11 of the Federal Law "On Protection of Competition" prohibits concerted actions between economic entities on goods markets if such agreements or concerted actions lead or can lead to increasing, reduction or fixing prices at competitive bidding.

Article 178 of the Criminal Code of the Russian Federation: prevention, restricting or eliminating competition by entering into competition-restricting agreements or exercising competition-restricting concerted actions, repeatedly abusing market dominance by fixing and (or) maintaining monopolistically high or low prices, unreasonably refusing or evading contracts, restricting market entry, if such actions cause heavy damages to individuals, organizations or the state, or have led to gaining large income, are punishable by a fine from 300,000 to 500,000 Rubles, or in the amount of the salary or other income of the convict for the period of one to two years, or imprisonment for up to three years, with or without prohibiting to hold particular positions or be involved in particular activities for the period of up to one year.