OREANDA-NEWS. May 23, 2013. In Austria the Head of FAS Department for Control over Financial Markets, Olga Sergeeva, took part in a Conference on combating antimonopoly violations and antimonopoly enforcement, where she moderated one of the three Round Tables included in the venue: “Leniency Programme and Compliance with the Antimonopoly Law”.

The Conference was organized in Vienna by Austria’s Federal Competition Authority. Attendees comprised representatives of competition authorities from European countries, including Bulgaria, Croatia, Hungary, Lithuania, Romania, Slovakia, Slovenia and Turkey, as well as the Eurasian Economic Commission and UNCTAD, and professors from Austrian and French universities.

Participants heard a report on the results of the work of Austria’s Federal Competition Authority in 2012; particularly, experience of the so-called Competition Talks with professional community organized by the antimonopoly body every six weeks to explain its position on certain issues and to talk about the current pressing problems of enforcement.

The Conference also discussed compliance policy as an enforcement instrument. Experts gave some statistics confirming a considerable growth of the overall size of the fines imposed in 2005-2009 in comparison with 1990-1994 in the European Union and the US for antimonopoly violations, particularly, based on judicial rulings.

An interesting discussion focused on the factors facilitating, or, on the contrary, preventing compliance to the antimonopoly law. Among the first group of factors participants mentioned a threat of fines, criminal prosecution and disqualification, possible harm to the business reputation of a company or a private person (management); a system of various rewards, including the in-house ones. The second group comprised the overall low level of legal culture demonstrated by companies, certain physical persons and even states; controversial signals from the companies’ executives who, on the one hand, encourage compliance with the law and on the other – request achieving the results at any price; an idea that the benefits of noncompliance with the antimonopoly law can exceed possible costs; and ignoring possible legal consequences of violations.

The Conference also heard a report on the theory and practice of deterring antimonopoly violations. It was pointed out that economists had developed a theory of the so-called “optimal fine” necessary to prevent an antimonopoly violation. The size of such fines is defined as a ratio of the benefit from committing an antimonopoly violation to the probability of exposing the violation. In particular, American researchers John Connor and Robert Lande concluded that the overall level of sanctions in the US was only 9-21% of the “optimal fine” for each cartel, and the size of the “optimal fine” was calculated as the ratio of the sum of benefits from the excessive prices and pure damages inflicted upon competitors to the probability of cartel exposure. Similar studies in the European Union showed that only 67% of the fines imposed by the European Commission were “optimal”.

At the Round Table moderated by Olga Sergeeva, a detailed account was given of Russian experience of the leniency programme provided for by the Code of the Russian Federation on Administrative Violations. Ms Sergeeva informed her foreign colleagues about submitting a draft Federal Law “On Introducing Amendments to Article 178 of the Criminal Code of the Russian Federation and Certain Legislative Acts of the Russian Federation”, devised by FAS and approved by the Government of the Russian Federation, to the State Duma for consideration. In particular, the draft Law clarifies the criteria and conditions of criminal leniency for the persons that committed a violation under Article 178 of the Criminal Code.

“The discussion based on all Conference Round Tables was also interesting because it looked into the issues of applying such institution of the European competition law as settlement, which does not exist in the Russian antimonopoly law. Under its framework, an antimonopoly body and respondents to a case suspected in participating in a cartel can reach an agreement on admitting the fact of taking part in the cartel. A consequence of such an agreement is a reduced fine, typically by 10%. It is important that settlements can only be used for cartels and cartel members lose the right to further challenge an agreement at Court”, said Olga Sergeeva.