OREANDA-NEWS. July 13, 2011. The Federal Antimonopoly Service (FAS Russia) made a decision on a precedent case against registrars of domain names in the .RF Internet zone. FAS found that “Regional Network Information Centre” CJSC (“TSITs” CJSC) and “Regional Network Information Centre” Autonomous Non-Commercial Organization (“RSITs” ANO) violated Federal Law “On Protection of Competition”, reported the press-centre of FAS Russia.

The FAS Russia’s Commission issued a determination to “TSITs” CJSC to transfer over 239 million Rubles to the federal budget as unlawfully obtained income.

FAS will also initiate administrative cases against “TSITs” CJSC and “RSITs” ANO, and considerer possible fines for violating the Code of the Russian Federation on Antimonopoly Violations.

FAS will also transfer the materials of the antimonopoly case to the law enforcement bodies.

The case was initiated on 19th November 2010 upon petitions from physical persons and legal entities that were unable to register domain names in the new domain zone .RF, where it is possible to write in Cyrillic.

It was revealed that “TSITs” CJSC registered for itself considerable number of domain names in the .RF zone – around 60,000 that should have been registered for the petitioners under the equal access principle.

“TSITs” CJSC was imposing disadvantageous conditions or conditions irrelevant to the contract subject (violating Clause 5 Part 1 Article 11 of the Federal Law “On Protection of Competition”) upon its clients, physical persons and legal entities that wanted to register for themselves domain names in the .RF zone. “TSITs” OJSC coordinated activities of other providers CJSC (violating Part 3 Article 11 of the Federal Law “On Protection of Competition”): “RELCOM.DELOVAYA SET” Ltd., “Demos-Internet” CJSC, “Registrator” CJSC, “Elvis-Telecom” CJSC and “RtComm.RU” OJSC.

According to the Rules of the Coordination Centre of the National Internet Domain, a single registrar (there are 21 registrars in total) could not register more than 4800 domains per hour. “TSITs” CJSC concluded customer agreements with a number of other registrars that registered domain names for “TSITs” CJSC as an administrator. However, FAS did not classify such actions as antimonopoly violations because these registrars had no right to refuse anybody to conclude a customer agreement.

FAS also found that “TSITs” CJSC was engaged in unfair competition (violating Part 1 Article 14 of the Federal Law “On Protection of Competition”). The company registered for itself a considerable number of domain names (more that it could have been under the conditions of fair competition) and exercised actions towards obtaining unjustified advantages over its competitors – other registrars of domain names.

FAS also established that “TSITs” CJSC and “RSITs” ANO violated Part 1 Article 11 of the Federal Law “On Protection of Competition” by entering into an agreement, under which domain names were put out to closed auctions. The income unlawfully obtained through such auctions was distributed between “TSITs” CJSC and “RSITs” ANO.

Reference:

Part 1 Article 11 of the Federal Law “On Protection of Competition” prohibits agreements between economic entities or concerted actions of economic entities on the market, if such agreements or concerted actions lead or can lead to:

1) Fixing or maintaining prices (tariffs), discounts, mark-ups, surcharges;

2) Increasing, reducing or maintaining prices in course of competitive bidding;

3) Dividing the market according to a geographical principle, volume of sales or purchase of goods, the range of products, or composition of sellers or buyers (customers);

4) Refusing to enter into contracts with particular buyers (customers) without economic or technological justification if such refusals are not directly provided for by the federal laws, normative legal acts of the President of the Russian Federation, normative legal acts of the Government of the Russian Federation;

5) Imposing disadvantageous contact conditions upon a counteragent or irrelevant to the contract subject (unjustified requirements to transfer financial means, other property, including property rights, as well as à consent to conclude a contract under a condition that it would include provisions about the goods, in which the counteragent is not interested, and other requirements);

6) Fixing different prices (tariffs) for the same goods without economic, technological or other justification;

7) Reducing or terminating production of goods, for which there is a demand or for supply of which orders are placed, provided there is a possibility of their profitable production;

8) Preventing market entry / exit of other economic entities;

9) Fixing conditions for membership (participation) in professional or other associations, if such conditions lead or can lead to preventing, restricting or eliminating competition, as well as fixing unreasonable membership criteria that prevent participation in payment or other systems, without participation in which financial organizations, competing between themselves, cannot provide necessary financial services.

Part 3 Article 11 of the Federal Law “On Protection of Competition” prohibits coordination of activities of economic entities by physical persons, commercial organizations and non-commercial organizations if such coordination lead or can lead to the consequences specified in Part 1 of Article 11.

Under Part 9 Article 4 of the Federal Law “On Protection of Competition”, unfair competition means any actions by economic entities (a group of persons), aimed at gaining advantages in course of entrepreneurial activities that are contrary to the law of the Russian Federation, customary business practice, and principles of honesty, reasonableness and fairness, and have caused or can cause damages to other economic entities - their competitors or have harmed or can harm their business reputation.