Comments made by lawyer Mikhail Ilyin to the article titled “You are not in the same league with Rostelekom”. Internet project “Telecomblog”

4 April 2011

The Pskov Department of the Federal Antimonopoly Service believed that Vympelkom (Beeline) has violated the competition law, by making an incorrect comparison between themselves and Rostelekom. As a result, the antimonopoly service initiated administrative proceedings against the mobile operator. Telecomblog tried to make out what was the mistake of Vympelkom.

In summer of 2010 Rostelekom filed a complaint to the Pskov Department of the Federal Antimonopoly Service, which stated that Vympelkom OJSC has violated the article 14 of the Federal law “On competition”. In their complaint they indicated that Rostelekom received a letter from their customer, i. e. MT “Zhilishno-Kommunalnoye Khosyaistvo” (a municipal housing economy) of Velikoluksky district asking them to revise the Pricing plan for long-distance and international telephony in connection with commercial offer by Vympelkom which contained better rates.

The above commercial offer contained two summary tables comparing service fees (rates) of Rostelekom and Vympelkom for long-distance and international telephony and the procedure of switching to defender’s rates. Having examined the offer, the Pskov Department of the Federal Antimonopoly Service found that Vympelkom committed violation of the law “On competition”.

However, representatives of Vympelkom informed us that the above offer was strictly recipient-oriented and developed at request of MT Zhilishno-Kommunalnoye Khosyaistvo of Velikoluksky district in view of a specific situation, moreover, the offer forwarded to the enterprise contained only information on rates of Rostelekom OJSC taken from their official website

In this context, the judgement which found Vympelkom guilty seems not very clear, because, according to one’s logic and common sense, a simple comparison table of rates contains no illegal information.

Mikhail Ilyin, a lawyer from the law firm S&K Vertical points out that the Federal law “On competition” only prohibits making comparison between goods produced or marketed by a business unit and goods produced or marketed by another business unit.

“As such, any comparison between goods and services when carrying out business activity isn't prohibited,” said the lawyer. “For instance, retail chain often display two food baskets filled with identical goods, and one of these basket features total cost of goods retailed in this outlet and another - total cost of goods retailed in a rival store. In such context this comparison is unbiased and correct.”

However, he added that since the text on violation of antimonopoly legislation is unavailable, one may assume that some additional circumstances were discovered during legal investigation, which confirmed incorrect nature of the above comparison. “One should note that the Federal Antimonopoly Service of Russia determines “the degree of correctness” independently and in their discretion”, since no accurate criteria exist, and, possibly, cannot exist,” said Mr. Ilyin.

The Beeline press-service was unwilling to comment this situation in detail, they only pointed out that they are ready to perform any lawful decision of the Federal Antimonopoly Service, and that the said incident had no impact on their partnership relations with Rostelekom.

This being said, it would be interesting to make out the reasons why the Federal Antimonopoly Service decided that comparison with Rostelekom was incorrect. Telecomblog has forwarded a letter of inquiry to the antimonopoly service, and received the following explanation.

During legal investigation a representative of Vympelkom explained that Rostelekom rates were included in the offer on request of the customer. However, in the course of proceedings Department of the Federal Antimonopoly Service has determined that MT Zhilishno-Kommunalnoye Khosyaistvo did not apply to Vympelkom with such request.

Thus, it is found that the said commercial offer was prepared by Vympelcom OJSC on their own initiative aiming to draw customer’s attention to competitor’s higher rates in the market of long-distance and international telephony and to attract a new client,” stated the Federal Antimonopoly Service.

Moreover, the antimonopoly service points out that every organization, when it forwards commercial offers to their potential customers, is building up individual approach to each customer, consequently, the final rates may differ from the initial ones. The case files contain indications that since July, 1, 2010 Rostelekom granted MT Zhilishno-Kommunalnoye Khosyaistvo a discount of current rates (for all traffic) of 45 % (i.e., the summary table presented by Vympelkom was inaccurate).

Finally, Vympelkom undertook to cease comparing their rates with those of the claimant, while Rostelekom renounced their claims to the mobile operator and asked to terminate the proceedings.

Aleksey Tsoy 

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