OREANDA-NEWS. May 04, 2011. The Federal Antimonopoly Service (FAS Russia) initiated a case against “Russian Railways” OJSC for violating Part 1 Article 10 of the Federal Law “On Protection of Competition” by exercising actions that lead to or can lead to preventing, restricting or eliminating competition, reported the press-centre of FAS Russia.

The case was initiated upon a petition of “TransKatCabel” CJSC about “Russian Railways” OJSC. “TransKatCabel” CJSC produces bearer cables and copper and bronze contact wires, used by “Russian Railways” OJSC.

“Russian Railways” OJSC sent telegrams to all railways in Russia (except SAKH), Roszheldorsnab, DKRS, DKSS, “Transelectromontazh” OJSC, “Energomontazh” Ltd., “Foratek Energo Trans Stroi” CJSC, “Transelectroset’stroi” CJSC, prohibiting these organisations to buy products of “TransCatCabel” CJSC and instructing them to purchase in 2010, as a priority, the cables and conducting products (multiwire copper and bronze contact wires) manufactured by “Transkat” CJSC, which is a member of the same group of persons with “Russian Railways” OJSC.

According to FAS Russia, such actions of “Russian Railways” OJSC are aimed at promoting the products of “Transkat” CJSC as a company associated with “Russian Railways” OJSC and ousting (eliminating) its direct competitor (“TransKatCabel” CJSC) from the relevant market.

Effectively “Russian Railways” OJSC is the monopsonist on the market of contact wires and is able to exercise decisive influence upon general conditions for circulation of contact wires on the relevant market of the Russian Federation.

“As “Russian Railways” OJSC is the monopsonist on the market of contact wires, the company is able to eliminate competition between product suppliers putting them in unequal positions in comparison with its subsidiaries. If FAS recognises that actions undertaken by “Russian Railways” OJSC are economically, technologically or otherwise unjustified, the company will face a turnover fine. Furthermore, FAS can issue a determination containing structural conditions – to sell a non-core asset – “Transkat” CJSC”, said the Head of the FAS Russia’s Department for Control over Industry and Defence Complex, Maxim Ovchnnikov.

Reference:

Part 1 Article 10 of the Federal Law “On Protection of Competition” prohibits actions (omissions) of an economic entity with dominant position if they have resulted or can result in preventing, eliminating, restricting competition and (or) infringing the interests of other persons.