What form can a cartel take? Cartel conspiracy in bidding. FAS check and judicial practice. Identity of application texts. Linguistic expertise
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December 15, 2011 The FAS Russia recognized 23 liquid caustic soda market participants as violating clauses 1, 3 and 4 of part 1 of Article 11 of the Law "On Protection of Competition". Earlier, the Federal Antimonopoly Service of Russia recognized United Trading Company (ETK) as the organizer of a cartel that had existed for a long time and its participants received income on an especially large scale.
The Federal Antimonopoly Service established that the companies and the division of the market have wholesale supplies of liquid caustic soda. High prices in the Russian market were supported, among other things, by selling soda for export at prices much lower than domestic prices.
AT October 2011 The Federal Antimonopoly Service initiated a case against mobile operators MTS and Vimpelcom (trademark Beeline). The agency found that these two companies import smartphones iPhone 4 16 Gb Black and iPhone 4 32 Gb Black to the territory of the Russian Federation without changing vacation pay Wholesale prices on smartphones since September 2010. According to the Federal Antimonopoly Service, Apple did not give recommendations to smartphone buyers regarding prices for devices in Russia and did not control the pricing policy of VimpelCom and MTS, nevertheless, the prices for these mobile phones in most Russian points of sale were identical. According to the antimonopoly agency, this situation has developed due to the fact that importers have agreed to renounce competition and agreed general terms and Conditions sales. The operators denied collusion, pointing out that smartphone prices are set based on market conditions.
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At the end January 2011 The Federal Antimonopoly Service of Russia recognized that the only supplier of Belarusian salt in the Russian Federation is Mozyrsalt OJSC and a number of Russian companies carried out a cartel conspiracy, fixing consumers in terms of the assortment and quantity of salt to eliminate competition. According to the regulator, Mozyrsalt OJSC, BPK LLC, TDS CJSC and Eurotrust Expo LLC violated antimonopoly law in part of Clause 3 of Part 1 of Article 11 of the Federal Law "On Protection of Competition" (dividing the commodity market according to the range of goods sold ). The FAS found that in February 2010 a meeting was held on the issue of selling salt at Russian market, where the participants reached an agreement on the conditions for the sale of salt produced by OAO Mozyrsalt. This was recorded in the minutes of the meeting. It was also established that the provisions of the protocols were followed. This, in particular, was evidenced by the data on the supply of products manufactured by the Belarusian company.
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AT end of 2010 FAS reported that it had disclosed, in which SUEK, Russian Coal, Stroyservis and other companies participated. According to the head of the FAS Igor Artemiev, these companies violated the law on protection of competition three times - they agreed to increase selling prices, divide the territorial boundaries of the market among themselves and agree on bidding at municipal procurement coal. According to the Federal Antimonopoly Service, the proceeds received by SUEK, Russian Coal and Stroyservis from the sale of coal at fixed prices, exceeded 100 million rubles, while SUEK's illegally obtained income as a result of price collusion amounted to more than 5 million rubles. The buyers suffered the corresponding damage.
AT late December 2010 Based on the results of the preliminary analysis, the FAS sent letters to oil companies demanding to explain the reasons for the increase in fuel prices. However, the rise in prices continued, and from October 2010 to the end of January 2011 it was 53% for winter diesel fuel. Prices for jet fuel during the same time increased by more than 30%. Then the FAS opened antimonopoly cases against the largest oil companies Rosneft, LUKOIL and Gazprom Neft, . In total, the Federal Antimonopoly Service initiated about 40 cases in the regional oil product markets due to the fact that regional sales companies that are part of VIOCs overestimate wholesale prices for independent filling stations, including with reference to prices of non-competitive exchange trading.
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Despite the fact that the state controls state auctions more and more every year, fraud in this area does not become less. Bid rigging accounts for about 80% of all cartels. In this article, we will talk about what types of collusion are and how to deal with them.
1. Punitive bidding is
cartel collusion bidding is an agreement that restricts or eliminates competition in bidding.Not law-abiding applicants, and often the Customer bypasses the law in a variety of ways in order to:
- conclude a contract with a certain performer (in case of collusion between the customer and the participant);
- or to reduce, increase or maintain the price of the contract as much as possible (mainly when collusion is concluded between competing participants).
- There are a lot of types of fraud, it all depends on what each individual participant is capable of. A variety of schemes are used, ranging from document manipulation to one of the most famous “ramming” schemes.
2. Types of bid rigging
There are two types of bid rigging:- Conspiracies of procurement contestants among themselves (cartel).
- Collisions between the applicant and the customer.
Ram in auction
"Ram" is a strategy for expelling bona fide bidders from the auction.
This scheme is actually quite simple, it is as follows:
A bidder who participates in such a collusion submits an application with the lowest price, which is unfavorable to other bidders in advance, as a result of which decent Contractors refuse to participate, since the purchase is no longer relevant for them. After that, the Customer reviews the second parts of the applications, at which it turns out that the applications of applicants participating in the "Taran" scheme do not meet the requirements and they are rejected.
And the applicant, with whom the Customer has an agreement to conclude a contract, puts his price offer at the last moment, which differs slightly from the original transaction price and wins it.
Having difficulties in the auction? Encountered a scam
Order competent assistance from our specialists in filing a complaint with the FAS.
Auction robots
On the this moment time, such a type of collusion as “digital” is gaining popularity, it uses auction robots that are pre-programmed for a minimum price reduction.
A similar collusion was registered in 2016 at an auction in the city of Murmansk. There, two companies programmed robots that reduced the price by 05% -1%, depending on which of them was supposed to own the contract.
During the period of 2017 and early 2018, more than 2,000 auctions in electronic format using robots were identified.
Submission of a non-competitive offer
The third type of collusion is collusion between procurement participants, in which case one of the bidders submits a losing price offer in advance or puts forward unacceptable conditions for the performance of the contract. This is done for the same purpose - the conclusion of an agreement with a pre-selected applicant.Agreeing not to bid or submitting a non-competitive bid is more detrimental to Customers. They do not allow the latter to save money and choose a better product, since there is nothing to choose from.
And for Contractors, on the contrary, the “ramming” scheme is the most problematic, because through it, conscientious Contractors survive, and this despite the fact that this scheme is as old as the world, but only in early January of this year, the FAS again opened it at the auction for repairs and maintenance buildings.
3. Ways to combat cartel collusion
Fighting different types collusion is possible and necessary. We have a number of recommendations in this regard:
1.
Regularly research purchases in your field of activity, review the winners to be sure that the deals were not made with the same supplier.
2.
Carefully study the documents for the purchase for the presence of hidden traps, pay attention in particular to the terms of reference and instructions for the application.
3.
Be sure to send a request for clarification of documents, if there are any questions, you don’t need to think it out, your mistake can help unscrupulous Customers commit a crime.
You need to complain not only about violations of the law on procurement (44-FZ and 223-FZ), but also about collusion (Articles 11 and 17 of the Law on Protection of Competition) at the auction.
4. Video instruction FAS check. Cartel collusion in bidding
For a guaranteed result in tender purchases, you can seek advice from the experts of the Entrepreneurship Support Center. If your organization belongs to small businesses, you can get a number of benefits: advance payments under government contracts, short time settlements, conclusion of direct contracts and subcontracts without a tender. and work only on profitable contracts with minimal competition!
In the article, we will analyze what a cartel is, schemes for its implementation, signs, penalties for suppliers participating in it, as well as judicial practice.
What is a cartel
This is an agreement between two or more companies (verbal or written) that operate in the same market. This is usually done in order to knock out a competitor from the struggle, set a maximum price that is profitable for themselves, maintain prices for a product or service at a certain level, force a rival to refuse to participate, divide the product market, etc. Such transactions restrict fair competition and are therefore considered illegal.
Suppliers who have to compete give up fighting for personal gain. This leads to an artificial increase in prices, new players are not allowed into the market, and customers are deprived of the opportunity to save.
What is a cartel in public procurement
Most often, collusion participants act according to three schemes. First called "ram". It is used in auctions. It got its name because conscientious competitors are literally knocked out of the fight. Most often, 2 participants participate in collusion. One of them reduces the price of the contract as much as possible to economically unprofitable. The rest of the participants see no reason to continue to reduce the price. There remains the second participant in the collusion, which reduces the price quite a bit. During the consideration of the second parts of the applications, it turns out that the application of the participant who reduced the price as much as possible does not meet the requirements of the customer - as a rule, for some formal or ridiculous reasons. As a result, the participant who practically did not reduce the price wins. He receives a lucrative contract, and the second participant in the conspiracy receives a monetary reward.
Second scheme- an agreement on passive participation in bidding (refusal to bid). It can be used in any procurement procedure. The participant agrees with the competitor not to submit a purchase order. In exchange, he is promised a good reward or other bonus. For example, swap places next time.
According to the third scheme one of the participants in the collusion takes part in the purchase, but submits an uncompetitive offer so that the second one wins, and he himself receives a benefit for this.
For a rollback during the purchase, they will be imprisoned for 12 years and will impose multimillion-dollar fines. Abuse in procurement is a crime not only for officials customer, but also for his representatives. Read about the articles of the Criminal Code that provide for penalties for customers, procurement participants and contractors.
Signs of a cartel
The main sign of collusion: the absence of competition in the behavior of participants. They operate according to a predetermined plan. Sometimes it is obvious, but sometimes multi-pass schemes are used. For collusion to be declared illegal, it is important that three conditions are met simultaneously:
- as a result, each participant is interested;
- the actions are known in advance to all participating companies;
- companies operate in conjunction with each other.
Sometimes the behavior of participants is monitored not within the framework of one purchase, but for a long time. If their pattern repeats, that's a sure sign of collusion. Often, violators do not stop at one purchase and continue their illegal behavior at other auctions. Another sign is that the participants know each other's next step in advance. Also distinguish the following signs:
- one of the participants reduces the price slightly, while the second lowers it to a minimum;
- as a result of the auction, the price offered by one of the participants turns out to be significantly lower than the market price (a conscientious supplier simply would not offer such a price);
- participants apply for the price reduction procedure, but do not participate in it.
Purchasing Cartel Penalties
Cartel cases are considered by the FAS. The department receives complaints from other participants, from customers, and also conducts planned and unscheduled checks. Evidence is needed to accuse procurement participants of conspiracy and illegal agreement. The direct ones include written agreements, correspondence by mail, minutes of meetings, etc. Circumstantial evidence is anything that confirms the existence of an agreement. Usually these are settlements between participants in a collusion, the use of the same IP address, EDS certificates issued to one person, etc. But the FAS needs not only to find evidence of collusion, but also to prove that the participants had a common selfish goal and they adhered to some kind of model.
Sanctions for cartel conspiracy are contained in Art. 14.32 Administrative Code of the Russian Federation. Moreover, punishment is provided not only for procurement participants, but also for customers, because they sometimes also enter into illegal agreements with suppliers. The customer faces a fine of up to 50 thousand rubles. or disqualification for up to three years (punish the contract manager). Companies face a fine from 1/10 to ½ of the initial cost of the goods, but not less than 100 thousand rubles.
If the damage from the actions of the participants in the conspiracy exceeded 10 million rubles, the punishment will be criminal. According to Art. 178 of the Criminal Code of the Russian Federation, the perpetrator faces:
- a fine of up to 500 thousand rubles;
- forced labor up to 3 years with disqualification up to 1 year;
- imprisonment up to 3 years with disqualification up to a year.
Judicial practice under 44-FZ
There are many signs by which you can determine the presence of collusion between the participants. Sometimes they don't even try to hide their illegal activities, as in the following practical example.
The budgetary institution "Smena" conducted electronic auction for the provision of cleaning services. 4 companies took part in the auction: TekhnoStroy LLC, VFM GROUP LLC, Atmosfera LLC, Atlas LLC. Two of them were especially active - TekhnoStroy LLC and VFM GROUP LLC. They submitted bids for the contract price, resulting in a 30.81% reduction in the starting price. In the last seconds, Atmosfera LLC joined in, which made a deliberately winning final offer.
The second parts of the applications of TekhnoStroy LLC and VFM GROUP LLC were rejected. Atmosfera LLC was recognized as the winner of the auction. At the same time, the violations committed by TekhnoStroy LLC, VFM GROUP LLC were of the same type.
When subsequently the FAS analyzed this purchase, it revealed the following action plan for the companies:
- become participants in the auction;
- achieve participation in the price reduction procedure itself;
- achieve rejection of the second parts of applications;
- to push LLC "Atmosfera" into the winners.
As the OFAS found out, TekhnoStroy LLC and VFM GROUP LLC submitted applications from the same IP address. To submit quotations, TekhnoStroy LLC, VFM GROUP LLC, Atmosfera LLC used a different address, but it again coincided for all three. The department saw in this the synchronism of actions - a sign of oral collusion. The behavior of TechnoStroy LLC, VFM GROUP LLC was recognized as aimed at excluding other participants in the auction in order to provide benefits to Atmosfera LLC.
In addition, both VFM GROUP LLC and Atmosfera LLC are registered at the same address, only the office numbers are different. These companies even indicated a single telephone number, and their email address exactly matches the one contained in the details of TekhnoStroy LLC. LLC "VFM GROUP" hastened to justify itself, stating that it was simply using a dot WiFi access, which is owned by Atmosfera LLC.
But the FAS was not convinced by such arguments. She drew attention to the fact that VFM GROUP LLC and TekhnoStroy LLC also had the same IP address. As for the same addresses Email and contact phone number, then this misunderstanding allegedly occurred due to the inconsistent use of the services of one person by VFM GROUP LLC and Atmosfera LLC. Needless to say, the FAS was also not convinced.
The FAS Commission found that two of the three companies in a short period of time alternately reduced the price of the lot by a significant amount, and the third, in the last seconds of the auction, offered a price lower than that of a bona fide participant and became the winner. The decision of the Commission of the Krasnodar OFAS Russia established the conclusion of a prohibited agreement between the participants.
cartel agreement
cartel agreement
A CARTEL AGREEMENT is an agreement between producers or consumers of products with the same name in order to smooth out competition and obtain higher profits based on the definition of a common financial and production policy.
Glossary of financial terms.
cartel agreement
A cartel agreement is an agreement between two or more businesses to form a cartel. Distinguish:
- horizontal cartel agreements between equally specialized firms; and
- vertical cartel agreements aimed at limiting market flexibility.
See also: cartels
Finam Financial Dictionary.
See what the "CARTEL AGREEMENT" is in other dictionaries:
Economic dictionary
cartel agreement- (Cartel agreement) - an agreement between several competing sellers on a joint policy in the field of prices and sales volumes. See Cartel... Economic and Mathematical Dictionary
cartel agreement- An agreement between several competing sellers on a joint policy in the field of prices and sales volumes. See Cartel Topics economy EN cartel agreement … Technical Translator's Handbook
cartel agreement Encyclopedia of Law
See Cartel Glossary of business terms. Akademik.ru. 2001 ... Glossary of business terms
An agreement between two or more enterprises or firms to form a cartel. A distinction is made between a horizontal agreement between equally specialized firms and a vertical agreement aimed at limiting flexibility ... ... Encyclopedic Dictionary of Economics and Law
cartel agreement- an agreement between two or more enterprises, firms to create a cartel. A distinction is made between a horizontal agreement between equally specialized firms and a vertical agreement aimed at limiting flexibility... Dictionary of economic terms
cartel agreement- (English cartel agreement; German Kartellabkommen) an agreement between producers or consumers homogeneous products(goods) in order to mitigate competition and obtain higher profits based on the determination of the overall financial and ... ... Big Law Dictionary
cartel agreement- - an officially formalized legal agreement between large commodity producers of the products of the same name, which provides for joint market research, price regulation, discounts, etc ... Concise Dictionary economist
An agreement between similarly specialized firms. Economic dictionary. 2010 ... Economic dictionary