OREANDA-NEWS. September 30, 2009. The 9th Arbitration Appeal Court pronounced validity of the determination issued by the Federal Antimonopoly Service (FAS Russia) after processing a petition of "Gazpromneft'-Ural" OJSC on purchasing service stations of "Ural-Viktan" Ltd., reported the press-centre of FAS Russia.

On 15th January 2009, FAS Russia agreed upon the transaction, and specified in its determination the conditions for preventing increase of the share of the group of persons of "Gazpromneft'-Ural" OJSC in retail markets of motor petrol and diesel fuel in Yekaterinburg over 50%. Should the market share exceed this level, "Gazpromneft'-Ural" OJSC must organize tenders to sell the service stations within the geographic boundaries of Yekaterinburg. "Gazpromneft'-Ural" OJSC challenged the determination of the Antimonopoly Service in a court of law.

The estimate the consequences of the transaction, FAS Russia studies the retail and wholesale markets of motor petrol and diesel fuel in Yekaterinburg.

The group of persons of "Gazpromneft'-Ural" OJSC possessed considerable market power before exercising the transaction. As a result of acquiring the main assets of "Ural-Viktan" Ltd., presence of "Gazpromneft'-Ural" OJSC in the regional market of motor petrol and diesel fuel increased due to acquired service stations. It means that the petitioner's share of the goods market also changed.

Changing (increasing) the market share changes (increases) the petitioner's ability to influence general conditions of goods circulation in the market and, as a consequence, increases possibilities for abusing market power by the economic entity.

FAS Russia established that the transaction could restrict competition in retail markets of motor petrol and diesel fuel within the geographic boundaries of Yekaterinburg, because it would strengthen the dominant position of the group of persons of "Gazpromneft'-Ural" OJSC.

The Appeal Court ruled that the FAS Russia's determination as justified and complied with the current legislation.

Control over economic concentration on the goods markets and financial markets by the Antimonopoly Service is absolutely essential to prevent abusing dominant positions by the companies. It is aimed directly at ensuring competition in various sectors of the economy.

Reference:
Sub-Clause d Clause 2 Part 1 Article 23 of the Federal Law "On Protection of Competition" allows the Antimonopoly Service to issue a mandatory determination to an economic entity , which prohibits such actions that can be an obstacle for developing competition and (or) can lead to restricting, eliminating competition and violating the antimonopoly legislation.