OREANDA-NEWS. October 12, 2010. Moscow Arbitration Court dismissed the claim of “Plastic” OJSC on invalidating the decision and determination of the Federal Antimonopoly Service (FAS Russia), reported the press-centre of FAS Russia. 

On 25th January 2010, FAS Russia found that “Plastic” OJSC abused market dominance (contrary to Clause 1 Par 1 Article 10 of the Federal Law “On Protection of Competition”).

The case was initiated upon a petition of “ROSVERTOL” Production Company” OJSC and “SEVMASH” Production Association” OJSC. According to the petitioners, the price of polystyrene grade PS-1 increased by 1.7 times from January 2009.

“Plastic” OJSC violated the law by fixing in Q1 2009 monopolistically high price for emulsion-polymerized polystyrene PSE-1 used to produce foamed plastic.

Reference:
Foamed plastic of this grade is used to production of special equipment under the government defense contract.

Investigating the petition, FAS Russia established that the reason for increasing prices for foamed plastic PS-1-100 was the growth of price for emulsion-polymerized polystyrene PSE-1, which has considerable share in production of foamed plastic. “Plastic” OJSC has capacity to produce general-purpose polystyrene: it produces polystyrene by processing customer-supplied raw materials and then re-sells finished products. The supplier - “SIBUR” Holding” OJSC, a member of the same group of persons with “Plastic” OJSC, - supplied the raw materials to “Plastic” OJSC for processing. “Analysis of priced for emulsion-polymerized polystyrene (PSE) showed that overall increase the costs of the product sold did not match the price increase set by “Plastic” OJSC”, said Deputy Head of FAS Russia Andrey Tsyganov.

Having investigated the case, FAS Russia issued a determination to “Plastic” OJSC obligating it to inform FAS Russia during five years after the date of receiving the determination about intended increase of prices for emulsion-polymerized polystyrene PSE-1 for more than 5%, enclosing supporting documentation. Also when entering into supply contracts with end customers, “Plastic” OJSC must set prices for PES-1, taking into account its profit from sale of PSE-1 (in Rubles) not exceeding the level of Q4 2008. Before gaining additional profit, the company must submit a justification for a FAS Russia’s approval.

Recognizing this type of violations by the antimonopoly authority constitutes the grounds for imposing an administrative fine under Article 14.31 of the Code of the Russian Federation on Administrative Violations. On 29th March 2010, the Federal Antimonopoly Service (FAS Russia) imposed administrative charges upon “Plastic” OJSC and fined the company 635,388 Rubles.

Reference:

under Article 14.31 of the Code of the Russian Federation on Administrative Violations, administrative changes are imposed upon an economic entity with dominant market position if it exercises actions that are recognized a busing marker dominance and are prohibited by the antimonopoly law of the Russian Federation.