OREANDA-NEWS. July 12, 2012. The Office of the Federal Antimonopoly Service in the Republic of Chuvashia (Chuvashia OFAS Russia) fined the “Federal Passenger Company” OJSC 287,900 Rubles for unreasonable reducing the number of couchette cars in No. 53/54 “Chuvashia” deluxe train on the Cheboksary – Moscow – Cheboksary route, reported the press-centre of FAS Russia.        

The “Federal Passenger Company” OJSC cut down the number of couchette cars by five (from nine to four) and at the same time increased the number of compartment cars in spite of a possibility of cost-effective production, stable demand and in the absence of any regulations, providing for such actions.

Actions towards reduction cheap fares for couchette cars and increasing the number of more expensive fares for compartment cars were possible due to dominant position of the company on the market. The following factors contributed to such actions: absence of regulations providing for replacing cheap fares with more expensive fares as a result of car replacement, possibility for cost-effective production and stable demand.

In December 2011, the Commission of Chuvashia OFAS Russia initiated a case against the “Federal Passenger Company” OJSC and issued a determination to eliminate the violation. The company filed a lawsuit. Chuvashia Arbitration Court supported Chuvashia OFAS Russia and recognized the fact of violating the antimonopoly law. The fine for violating Clause 4 Part 1 Article 10 of the Federal Law “On Protection of Competition” was 1.3 % of the income from services for passenger transportation in couchette cars on the Cheboksary – Moscow – Cheboksary route in 2010.

Under Part 5 Article 5 of the Federal Law “On Protection of Competition”, dominant position shall be recognized for an economic entity – a holder of a natural monopoly on the market in a state of natural monopoly. Thus, the “Federal Passenger Company” OJSC is a natural monopoly in railway transportation, in particular, passenger transportation on the Cheboksary – Moscow route.

Reference:
Clause 4 Part 1 Article 10 of the Federal Law “On Protection of Competition” prohibits economically or technologically unjustified reduction or terminating goods production if there is a demand for the goods or orders are placed for supplying the goods, provided there is a possibility for cost-effective production, and if such reduction or termination of production is 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, normative legal acts of the authorized federal executive bodies or judicial acts.