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Russia Investigates Pricing Abuse In Bearing Steel

Release time : 2015-06-13 08:11:19
The Government of Russia, via the Federal Antimonopoly Service (FAS; website), has reportedly begun investigations into the pricing practices of Magnitogorsk Iron & Steel works and Metalloinvest's Oskolsky Electrometallurgical Works. The FAS said two investigations were opened, covering the, "abuse of dominant position by fixing monopolistically high prices". Specifically, that the two companies, "violated the antimonopoly legislation by fixing prices on metal products used for manufacturing bearings." Declining prices in other world markets, but not paralleled in Russia, prompted the investigation. The FAS said it was investigating the trends: "foreign market have changed and currently steel prices for manufacturers of bearings tend to decrease." However, prices in Russia remain artificially high, so FAS Russia believes the companies must lower their prices in order to stay in line with global economic and market conditions. The FAS warned: "Failure to ensure that prices were adequate to the market situation constituted the grounds for initiating the antimonopoly cases." If either or both of the companies are found guilty, the FAS has an exceptionally wide range of options -- from doing nothing all the way to putting a company out of business. Most often, fines are imposed, equivalent to a company's income the FAS believes was improperly obtained.