OREANDA-NEWS. On 14 - 20 October 2013, in Capetown (the Republic of South Africa), an assistant to the Head of the Federal Antimonopoly Service (FAS Russia) Vladimir Kachalin took part in a workshop of Cartel Working Group of the International Competition Network (ICN), where he made reports on “Alternative Methods of Cartel Exposing: Using Information on the Market and Conduct of the Leading Companies to Expose Collusions” and “Determining Priorities in Cartel Investigations: FAS Experience”.

In the first report Vladimir Kachalin raised an issue of explicit and implicit collusions: in the former participants jointly articulate their intentions and leave evidence of collusion (documents, video records, etc.), while in the latter they exercise parallel actions on the market without an apparent articulation of their intentions. The report analyzed FAS efforts to monitor the key markets with oligopolistic structure in this context.

Using comparable markets as the source of information for exposing cartels was illustrated with an example of a recent exposure of the fact of collusion on the Moscow - Perm route between “Aeroflot - Russian Airlines”, Siberia” and “UTair”, whose overall market share reached 90% of passenger air transportation on this route. According to FAS, the air carriers practically simultaneously raised the air fares on this route, which then exceeded the air fares on the routes with similar distance and flight time, for instance, Moscow - Krasnodar and Moscow - Ufa. FAS foreign colleagues in general supported the methodology used by FAS to investigate the case. A similar approach was applied, in particular, by Italy's antimonopoly authority to expose a cartel on the market of ferry transportation between the inland Italy and Sicily.

Workshop participants also showed considerable interest to the experience of comparing prices and conduct of economic entities on the markets, analyzed using an example of a warning issued by FAS in September 2013 to “Rosneft”, “Gazpromneft” and “TNK-BP” not to reduce the monthly sales of oil products through a commodities exchange.

Exposing potential cartels on the basis of specific conduct of economic entities on the market was illustrated with an example of suppressing collusion between three suppliers of food products for the state needs. Two suppliers imitated aggressive price competition bidding for the contract; however, they refused to sign a contract after the winner was announced. As a result the contract was awarded to a third company that offered the price considerably lower than the original one.

In the second report devoted to the priorities in cartel investigations, Vladimir Kachalin, in particular, analyzed the role of such factors as economic and social importance of goods markets, potential preventative effect of suppressing collusions, recidivism of cartel violations, chances for solving a case and direct evidence, the international significance of a particular case, and participation of foreign economic entities in a cartel.

“Combating cartels is a top priority for the majority of competition authorities in the world. Taking into account that lately cartels tend to become cross-border, we must fight with them together, regularly exchanging investigations experiences”, commented Vladimir Kachalin.