Due to the COVID-19 outbreak, the Russian authorities at different levels (the President, the Government, the Health authorities and also the regional bodies, such as the Mayor of the City of Moscow and the Governor of the City of Saint-Petersburg) are progressively implementing various measures aimed at stopping the spread of coronavirus. The President of the Russian Federation in his speech to the nation on 25 March 2020 addressed certain economic concerns linked with the current situation and also announced that the period from 28 March to 5 April 2020 will be a week off in Russia. During that period, the federal and regional authorities will function. However, the number of public servants will be reduced to a minimum.
The above is also applicable to the Russian competition authority (“FAS”). Currently the FAS’ functions are uninterrupted, save for certain specific technical and sanitary measures linked with COVID-19. However, the situation may change starting from next week, although representatives of the authority were today unable to provide us with any details or to confirm whether the authority will continue to operate at all. A significant slowdown of activity can be reasonably expected.
Cartels and abuse of dominance
The FAS regularly publishes various communications and reports related to the current situation on its website. On 25 March 2020, it encouraged businesses to behave responsibly and not to seek to exploit the situation with a view to obtaining extra profits.
Furthermore, the FAS closely monitors the situation with prices on the market of goods in high demand, such as medicines, medical face masks and also food, as, allegedly, there have been several cases of abuse in the market. A special FAS hotline is available for communication to the authority of any breaches of the Competition Law in this regard.
In the meantime, the Russian Competition Law and the applicable secondary legislation is unchanged. No specific exemptions, as regards cartels or abuse of dominance regulations, have been announced by the authority so far.
Based on recent communications from the FAS, if it becomes aware of any unjustified increase of prices of goods in high demand, it will investigate such situations in the usual way and adopt appropriate measures in relation to the offenders.
As of today, the main exemption admitted by the FAS relates to the recognition of COVID-19 as force-majeure. According to a letter circulated by the authority on 18 March 2020, this view should be taken into account in the area of public procurement (which is also supervised by the FAS). Thus, according to the FAS’ position, goods may be purchased without observing the established competitive procedures if necessary to prevent or reduce the consequences of COVID-19.
3. Abuse of market power
4. Merger control
Finally, as regards merger control, no amendments to the existing regulations have been adopted. However, due to technical and sanitary measures which have been implemented, the statutory deadlines for review of notifications are not being observed by the regulator and significant delays with obtaining merger clearance should be expected.