OREANDA-NEWS. November 24, 2014. The Federal Arbitration Court of the Moscow District dismissed the cassation appeal of “URALSIB” OJSC to abolish judicial acts that recognized legitimacy of the decision and determination on the case of “URALSIB” OJSC and “Volkswagen RUS Bank” OJSC violating the antimonopoly law, as well as a determination to impose fines upon the fact of the violation.

On 23 October 2013, the joint Commission of FAS Russia and the Bank of Russia found that “URALSIB” OJSC and “Volkswagen RUS Bank” OJSC violated Part 4 Article 11 of the Federal Law “On Protection of Competition” due to concluding the Agreement on Cooperation.

The Agreement took place because “Volkswagen RUS Bank” OJSC did not have a license for depositing assets of physical persons, so “URALSIB” OJSC was supposed to open accounts for the borrowers of “Volkswagen RUS Bank” OJSC to deposit and service the loans granted by “Volkswagen RUS Bank”.

Under the Agreement, “URALSIB” OJSC was obligated not to recommend and not to create conditions for the customers of its partner obtaining services of “URALSIB” OJSC to repay loans of “Volkswagen RUS Bank” OJSC as well as for any other purposes including purchasing vehicles.

Investigating the case, it was established that at the time of concluding the Agreement the banks were potential competitors on the market of auto loans for physical persons, and actually became competitors in the process of executing the Agreement.

The Commission concluded that by entering into an Agreement under such conditions, “URALSIB” OJSC refused to undertake some independent actions on the market in question – to compete with “Volkswagen RUS Bank” OJSC for its customers.

Taking into account that the violation was not eliminated at the time of making the decision, the Commission issued a determination to the respondents to exclude anticompetitive provisions from the Agreement, which they later fulfilled within the designated period.

Due to the exposed violation, “URALSIB” OJSC and “Volkswagen RUS Bank” OJSC were held administratively liable under Part 1 Article 14.32 of the Code on Administrative Violations.

The credit organizations disagreed with the Commission decision and determination as well as definitions on imposing fines, and filed a lawsuit.

On 29th May 2014, Moscow Arbitration Court dismissed the claim of “URALSIB” OJSC and “Volkswagen RUS Bank” OJSC confirming legitimacy and reasonableness of the acts passed by the antimonopoly authority.

On 29 July 2014, the 9th Arbitration Appeal Court also dismissed the banks’ appeal of the judgment of Moscow Arbitration Court.

Commenting on the judicial acts, the Head of FAS Department for Control over Financial Markets, Olga Sergeeva, stated: “The case against “URALSIB” OJSC and “Volkswagen RUS Bank” OJSC is not the first and only case when arrangements for a universal bank to refuse to compete with a highly specialized captive bank in the only segment where the latter works are exposed and recognized as violating the antimonopoly law”. As Olga Sergeeva pointed out, “it is important that judicial support of our decision will be a signal for other market participants, who intend to work in a similar manner, to rebuild relations and find a form of cooperation that comply with the antimonopoly law”. In conclusion, the Head of FAS Department for Control over Financial Markets added that “it is possible to minimize the antimonopoly risks, in particular, by submitting a draft agreement to the antimonopoly authority under Article 35 of the Federal Law “On Protection of Competition”.

Under Part 1 Article 35 of the Federal Law “On Protection of Competition”, economic entities that intend to reach an agreement acceptable under the Federal Law, can ask the antimonopoly authority to verify whether a draft written agreement comply with the antimonopoly law.

Part 4 Article 11 of the Federal Law “On Protection of Competition” prohibits other agreements between economic entities if such agreements lead or can lead to restricting competition.

Under Clause 17 Article 4 of the Federal Law “On Protection of Competition”, refusals of economic entities that are not members of the same group of persons to undertake independent actions on the market is a sign of restricted competition.

Part 1 Article 14.32 of the Code on Administrative Violations specifies that concluding an agreement by an economic entity prohibited by the antimonopoly law of the Russian Federation as well as participating in the agreement is punishable by an administrative fine upon legal entities – from one hundredth to fifteen hundredths of the income of a violator from selling goods (works, services) on the market where the administrative violation was committed but no less than 100,000 RUB.