The Penza Region Department of the Federal Antimonopoly Service (FAS) of Russia has declared Rostelecom a dominant
The Penza Region Department of FAS of Russia (the Department) has imposed a fine on the company Rostelecom, in the amount of 7,675,000 rubles, for abuse of the dominating position on the region’s commodity market. The complaint against the company was filed by a local telephone communications operator Ru Star Telecom.
The press service of the Department has issued an official information: “In September 2011, a committee of the Penza Region Department of FAS of Russia ruled the actions of OJSC Rostelecom of creation of discriminative conditions for other communication operators at the choosing (changing) of the operator of international and intercity telephone communication by the clients, abuse of the dominating position and violation of paragraph 8 part 1 Article 10 of the Federal Law “On protection of competition”.
The case of Rostelecom was initiated upon the request by Ru Star Telecom LLC on the issue of rendering services of change of international and intercity telephone communications operator. According to the Department, Rostelecom was able to influence the access conditions to the market of international and intercity telephone communications for the competitors, since, being a local communications operator, it conducted the works of the change of operator of this type of communications. Availing itself of this advantage, Rostelecom fixed a simplified procedure of choosing Rostelecom as communications operator by the clients in comparison to the procedure applied when choosing other operators.
Committee of the Department did not accept Rostelecom’s arguments that no communications operator of the Penza Region had addressed the company on the issue of organization of the simplified procedure of switching to their services. The Department informed that the company Ru Star Telecom had sent, in April of 2011, a letter to Rostelecom requesting that an opportunity to create intellectual numbers be granted to it, but no response had followed.
Artem Kukin, the expert of the Firm, explained to the reporter of ComNews: “In order to rule that an organization was abusing its dominating position, the antitrust authority must discover and prove the existence of such dominating position. The Penza Region Department of FAS of Russia, within the considered case, referred to the dominating position in the market of local telephone communications, since Rostelecom is included in the register of economic subjects with more than 50% share of the local telephone communications market and in the register of natural communications monopolies. At the same time, the imputed offence was committed in the market of intercity and international telephone communications, the operator’s share on which the Department did not analyze. Moreover, the list of communication services rendered by any operator (Rostelecom included) is given in schedules to the Resolution № 161, dated 28.03.2005, of the Government of the Russian Federation. The fixed communication services are not interchangeable, and cannot thus be pooled within a single market of commodities. In particular, this regulatory act specifies the service of international call termination, the service of intercity call termination and the service of local call termination as separate services. Logically, each of these services is a separate commodities’ market. Therefore, not only did the antitrust authority fail to apply said communications legislation norms, but it also considered the company’s actions as if these had been conducted on an integrated communications market. In connection with the fact that the company’s dominating position on the market, where the imputed offense had been committed, was not ascertained, I believe that the resolution of the Department may be appealed against. Besides, the Department did not study the conditions of introducing of the simplified procedure by other communications operators (at least, the respective arguments were not mentioned in the decision)”.
Artem Kukin believes that: “It is difficult to give estimates of the chances of Rostelecom winning the lawsuit without having studied the materials of the antitrust case. But one should note that violations made by the antitrust authority during the analysis of the commodities market and ascertaining the dominating position have already been considered by courts with the participation of the antimonopoly authority and Rostelecom. For example, in September of 2011 the Supreme Court of Arbitration of the Russian Federation (SCARF) upheld the position of Rostelecom claiming illegality of the decisions of the FAS (case №А40-6002/10-154-15). This case also dealt with the abuse by the company of a dominating position, and Rostelecom was claiming incorrect study of the commodities market. The SCARF has not yet published its Ruling, but we may still hope that its position will demonstrate the correct application of the provisions of protection of competition and of communications legislation in the part of ascertaining the commodities market and dominating it as well as antitrust actions themselves”.
A representative of the press service of the Volga Macroregion of OJSC Rostelecom told the reporter of ComNews: “The resolution of the Penza Region Department of FAS of Russia, which violates the requirements of part 1 Article 10 of the Federal Law “On protection of competition”, is being appealed against to the Court of Arbitration of the Penza Region, the court session has been scheduled for November 16, 2011. The issue, whether to appeal against the decision to impose an administrative fine on Rostelecom, will be resolved after this decision is rendered”.
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