FAS Russia Enforcement: Abuse of Dominance, Anticompetitive Agreements, and Digital Markets

The Federal Antimonopoly Service of the Russian Federation (Federalnaya Antimonopolnaya Sluzhba, FAS Russia) is the primary authority for competition law enforcement in Russia. Established in 2004, FAS Russia operates under Federal Law No. 135-FZ of 26 July 2006 on the Protection of Competition (Zakon o zashchite konkurentsii). The FAS is responsible for preventing and suppressing anticompetitive conduct, controlling economic concentration, preventing unfair competition, and supervising compliance with competition law in state procurement and advertising. The FAS has developed into an increasingly active and sophisticated enforcement authority, with significant cases involving abuse of dominance, anticompetitive agreements, digital market regulation, and pharmaceutical cartels.

Abuse of Dominance

Article 10 of the Competition Law prohibits abuse by an economic entity of its dominant position on the product market. Dominance is defined as the position of an economic entity in a particular product market that enables it to exert a decisive influence on the general conditions of circulation of goods in the relevant market and to eliminate or restrict access to that market. A market share of 50% or more creates a presumption of dominance, while a share of less than 35% is generally considered non-dominant (subject to exceptions for collective dominance). Prohibited forms of abuse include the imposition of unfair prices or terms (monopolno vysokie or monopolno nizkie tseny), withdrawal of goods from circulation to create shortages, restriction or termination of production, imposition of contractual terms disadvantageous to the counterparty, economically or technologically unjustified refusal to contract, discriminatory conditions, and tying arrangements. The FAS has pursued abuse of dominance cases against major Russian companies, including Gazprom (gas pricing and transit access), Russian Railways (infrastructure access and tariff setting), and digital platforms such as Yandex (search and advertising market practices).

Anticompetitive Agreements

Article 11 of the Competition Law prohibits agreements (soglasheniya) between competing economic entities (cartels) and between entities in different levels of the production-distribution chain (vertical agreements) that restrict competition. Horizontal cartel agreements — including price-fixing, market allocation, output restriction, and bid-rigging in procurement — are subject to the most severe penalties, including turnover-based fines. Vertical agreements that lead to resale price maintenance or territorial restrictions may also violate the prohibition if they restrict competition. The FAS has developed active cartel enforcement, with particular emphasis on bid-rigging in state procurement, pharmaceutical cartels, and infrastructure cartels. The FAS operates a leniency programme (programma smyagcheniya nakazaniya), under which the first cartel participant to cooperate with the investigation may be exempted from administrative liability, and subsequent cooperators may receive reduced penalties. The Criminal Code also provides for criminal liability for cartel activity under Article 178, though the provision has been applied infrequently due to the high threshold for criminal prosecution.

State Aid Control

The Competition Law prohibits state and municipal bodies from adopting acts or taking actions that restrict competition. Article 15 prohibits the imposition of restrictions on the creation of economic entities, the granting of advantages to specific entities, the establishment of prohibitions on the free movement of goods, and other anticompetitive state actions. Article 16 prohibits agreements between state bodies and economic entities that lead or may lead to restriction of competition. The FAS reviews state aid (gosudarstvennaya pomoshch) measures for compatibility with competition law. State aid — defined as the provision of advantages to specific economic entities by state or municipal bodies — is generally prohibited unless it falls within specified exceptions (support for small and medium enterprises, agricultural producers, innovation, social assistance, and natural disaster relief). The FAS has pursued cases against regional governments for granting unlawful advantages to local businesses and for adopting regulations that restrict interregional trade.

Digital Markets

The FAS has developed an active enforcement programme in digital markets, addressing competition issues in online search, e-commerce, app stores, and digital advertising. The Yandex cases — including the 2020 proceedings regarding Yandex’s search and advertising practices — raised questions about the dominance of digital platforms and the application of traditional abuse of dominance concepts to multisided markets. The FAS introduced the Fifth Antimonopoly Package in 2021, which amended the Competition Law to address specific features of digital markets. The amendments introduced the concept of network effect as a factor in determining dominance in digital markets, established rules for the treatment of large volumes of user data as a barrier to entry, and provided for the regulation of digital platforms that occupy a dominant position. The Fifth Antimonopoly Package also introduced the concept of price algorithms and price robots (tsenovye roboty), prohibiting the use of automated pricing systems to coordinate prices in violation of competition law. The FAS has also investigated Apple’s App Store practices, Google’s Android operating system, and the practices of online travel agencies and classified advertising platforms.

Pharmaceutical Cartels

Pharmaceutical cartel enforcement has been a priority for the FAS, reflecting the social significance of the pharmaceutical market and the high margins available through collusive pricing. The FAS has uncovered numerous cartels involving pharmaceutical distributors and manufacturers, including bid-rigging in state procurement of medicines, market-sharing agreements, and coordinated price increases for essential medicines. The FAS has applied turnover-based fines in pharmaceutical cartel cases, calculated based on the revenue of the participants from the relevant product market. The enforcement has led to increased competition in state pharmaceutical procurement, though the persistence of cartel activity indicates ongoing challenges. The FAS has also addressed abuse of dominance in pharmaceutical markets, including cases against patent holders for excessive pricing of essential medicines and against distributors for anticompetitive practices in regional pharmaceutical markets.

Sanctions for Violations

Violations of the Competition Law attract significant administrative penalties. Article 14.31 of the KoAP RF establishes fines for abuse of dominance, with fines for officials ranging from 15,000 to 20,000 rubles and fines for legal entities ranging from 300,000 to 1 million rubles, or turnover-based fines of 1–15% of the violator’s revenue from the relevant market (with a minimum of 100,000 rubles and a maximum of 4% of total revenue). Cartel violations under Article 14.32 of the KoAP RF attract turnover-based fines of 1–15% of revenue from the relevant market (with a minimum of 100,000 rubles). Repeat violations and particularly serious violations may attract disqualification of officials (prohibition on holding certain positions for up to three years) and criminal liability under Article 178 of the Criminal Code (imprisonment of up to seven years for cartel violations causing large-scale damage). The FAS also has the authority to issue binding orders (predpisaniya) requiring violators to cease anticompetitive conduct, restore the status quo ante, and take corrective actions.

Significance

FAS Russia has developed into one of the most active competition enforcement authorities among BRICS countries. The agency’s enforcement programme spans traditional competition concerns (abuse of dominance, cartels) and emerging issues (digital markets, algorithmic pricing). The turnover-based fine system provides a powerful deterrent, and the FAS’s specialist expertise in regulated markets (pharmaceuticals, telecommunications, energy) enables sophisticated enforcement. The Fifth Antimonopoly Package positions the FAS at the forefront of digital market regulation. The effectiveness of FAS enforcement is constrained by the political and economic power of the state-owned enterprises that dominate many Russian markets and by the limited independence of regulatory authorities in the Russian governance system.