OREANDA-NEWS. November 22, 2011. The 9th Arbitration Appeal Court dismissed the claim of “KRK” CJSC to reverse the judgment of Moscow Arbitration Court of 23rd August 2011 and to pass a new judicial act invalidating the FAS order to hold “KRK” CJSC administratively liable under Article 14.32 of the Code on Administrative Violations and to fine the company over 7 million Rubles (7,310,625.78 Rubles), reported the press-centre of FAS Russia.

“KRK” CJSC concluded and exercised anticompetitive agreements that resulted (could have resulted) in fixing and maintaining prices (tariffs) for vehicle insurance for physical persons who were clients of “KRK” CJSC and “KRK” Commercial Bank” OJSC. The company also violated the law by concluding and exercising agreements that resulted (could have resulted) in imposing disadvantageous insurance conditions to the clients of “KRK” CJSC and “KRK” Commercial Bank” OJSC, in the part of fixed insurance premium for the second and subsequent vehicle insurance years – at 9.99%.

Not challenging the fact of the administrative violation, “KRK” CJSC lodged an appeal referring to FAS failure to apply Part 3 Article 4.1 of the Code on Administrative Violations: determining the size of the administrative fine without taking into consideration the property status of “KRK” CJSC.

The 9th Arbitration Appeal Court ruled that determining the size of the administrative fine FAS had reasonably taken into consideration the nature of the violation (a long period – over five years, several anticompetitive agreements, and significant violation of protected social relations), as well as an aggravating circumstance specified in Clause 4 Part 1 Article 4.3 of the Code on Administrative Violations – committing violations by a group of persons.

In 2010, FAS exposed a price cartel on the market of vehicle insurance between the KRK group of persons comprising “KRK” CJSC /Retail Crediting Company/, “KRK-Strakhovanie” Ltd. and “KRK” Commercial Bank” OJSC., as well as six insurance companies: “AlphaStrakhovanie” OJSC, “MSK” Insurance Group” OJSC, “Rosgosstrakh” Ltd., “Admiral” Insurance Group” Ltd., “Renaissance” Insurance Group” Ltd. and “Russkaya” Insurance Company” OJSC.

Having investigated the antimonopoly case, FAS found that the above legal entities violated Part 1 Article 11 of the Federal Law “On Protection of Competition”. Upon the fact of recognising the antimonopoly violation FAS opened administrative proceedings against the “KRK” group of persons and insurance companies and imposed turnover fines upon the participants of the price cartel for the total amount over 115 million Rubles.

Reference

1. Article 14.32. Concluding competition-restricting agreements, exercising competition-restricting actions, coordinating economic activities

1. If an economic entity concludes an agreement prohibited by the antimonopoly law of the Russian Federation, as well as participate in it or if an economic entity exercises concerted actions prohibited by the antimonopoly law of the Russian Federation – it is punishable by an administrative fine upon officials – from 20,000 Rubles to 50,000 Rubles, or disqualification for a period of up to three years; for legal entities – from one hundredths to fifteen hundredths of the income of the violator from selling goods (works, services) on the market, where the administrative violation was committed, but no less than 100,000 Rubles, and if the income of the violator from selling goods (works, services) on the market, where the administrative violation was committed, exceeds 75 % of the total income of the violator from selling all goods (works, services) – from three thousands to three hundredths of the income of the violator from selling goods (works, services) on the market, where the administrative violation was committed, but no less than 100,000 Rubles.