FAS was strict towards MGTS

The Court of Arbitration took the side of the antitrust service and upheld the decision by the Moscow Department of the FAS of Russia, which had exposed unfair competition practice by MGTS. In-house lawyers do not agree with the wording employed by the FAS Department and with the strict court ruling.

The case was initiated as early as March of 2011 upon request by Rostelecom. According to it, MGTS had executed with “Comstar-OTS” and Rostelecom contracts of automatic information service for the clients on long distance calls services, and actually provided only the information on “Comstar” services suggesting that clients should dial “Comstar” codes for long distance calls and not giving information on other operators’ services.

Since June 2009 till January 2010, numerous complaints were filed to MMT – a subsidiary of Rostelecom – by clients who had traditionally chosen Rostelecom as their operator of long distance calls. The clients said that, when dialing interurban and international numbers, they heard the automated message that a certain code was to be dialed to complete the call. The clients dialed the code and made their calls, and at the end of the month found out that the bill was issued by an operator other than Rostelecom. Then Rostelecom decided to file a request with the Moscow Department of FAS to protect its rights and the rights of its clients.

According to the materials of the case, since April 2009 till January 2010, when a client of MGTS placed an interurban call, the automated message of the Moscow operator suggested dialing the codes 23 or 28, which are the codes of international and interurban calls of “Comstar”. The automated message also communicated that the call would be serviced by “Comstar”, and if the client wished that his call be serviced by another operator, it was suggested that he should dial the prefix of the chosen operator after the 8. No information on the codes of other operators was given.

A committee of the Moscow DFAS acknowledged that MGTS had treated “Comstar-OTS” preferentially, by giving more complete and accurate information of its services, thus violating part 1 of Article 14 of the Federal Law “On protection of competition”. MGTS did not agree with the position of the antitrust authority and resorted to courts. The first instance court upheld the legality of the Moscow DFAS.

We remind that “Comstar-OTS”, before it merged with MTS in early 2010, had owned the controlling stock of MGTS. “Comstar-OTS” no longer exists as a legal entity, and MGTS integrates the MTS group of companies. According to the information by the press service of MGTS, the company does not agree with the court ruling and is going to appeal against it pursuant to the legally established procedure.

Arthur Rokhlin, Partner at the Firm, believes that MTS has, quite likely, committed an offence, but not in the form of unfair competition and rather in the form of abuse of dominant position: either by creating discriminative conditions or by impeding access to the commodities market. Rokhlin explained: “As I see it, there was an offence, but the decision by the FAS Department does not conform to the law”.

Full version of the publication is available here.