At a recent meeting, the Presidium of the Federal Antimonopoly
Service of Russia (the "FAS") adopted Clarification No. 2
of 17 February 2016 (the "Clarification"), concerning the
application of antimonopoly legislation to vertical agreements,
including distribution agreements. In particular, the Clarification
concerns vertical agreements to which the parties may potentially
prove to be competitors.
The Clarification affirmed the FAS's
position1 that a distribution agreement is a
vertical agreement, even when the parties to the agreement (a
manufacturer and a distributor) sell goods in the same product
market, if the following conditions are met:
the distributor engages in the sale of goods purchased from the
the distributor does not engage in the manufacture of
substitute goods, and
the distributor sells substitute goods produced by other
These criteria provide clear guidance to manufacturers in work
with distributors, including guidance in identifying terms of
vertical agreements that are prohibited by law. We recall that
according to clauses 1 and 2 of article 11(2) of Federal Law No.
135-FZ of 26 July 2006 on Protection of Competition, vertical
agreements are prohibited from including provisions setting a
minimum or fixed resale price (only a maximum or recommended price
is permitted to be set) or requiring a buyer not to sell competing
Referring to the criteria for admissible vertical agreements,
the FAS reiterated that dealer agreements between auto
manufacturers and dealers meeting all requirements of the Code of
Conduct in the Automotive Sector2 are not
automatically, but very likely to be, recognized as admissible. The
FAC focuses the attention of market participants on the importance
of doing business properly, in particular with due regard to the
provisions of the Code as a mechanism for market self-regulation. A
similar Code of Conduct for the pharmaceutical industry is to be
adopted in March 2016.
The Clarification also clearly identified the cases in which an
agency agreement does not constitute a vertical
agreement.3 When products are supplied on the
basis of an agency agreement, than relationship is subject to the
prohibitions established for vertical agreements, even though one
of the parties to the agreement is formally an agent. That said, it
is unclear how this principle would apply to, for example, the
provision of services, where the line between the functions of
contractor and agent is not always clear.
On the whole, not being "revolutionary" in nature, the
Clarification summarized the FAS's position on certain aspects
of vertical agreements. It should be remembered that the
Clarification is recommendatory in nature and does not contain
1 Decision of the Presidium of FAS Russia No. 5-15/1-2 of
23 May 2012.
2 The Code of Conduct in the Automotive Sector (adopted
by the Automobile Manufacturers Committee of the Association of
European Business on 6 December 2013).
3 The specific identification of an agency agreement as a
vertical agreement was eliminated by Federal Law No. 275-FZ of 5
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