Appeal against the order to conduct an investigation by the Agency for Protection and Development of Competition
No. 6001-23-00-6ap/975 (2) dated 24.10.2023
Plaintiff: LLP "C", LLP "T"
Respondent: Russian State Institution "Department of the Agency for Protection and Development of Competition of the Republic of Kazakhstan" (hereinafter – the Department)
The subject of the dispute: the appeal of the order to conduct an investigation
Review of the plaintiffs' cassation complaints
PLOT: By the Department when studying the Internet resource of public procurement of the Republic of Kazakhstan https://www.goszakup.gov.kz/ru It was established that the State Institution "Police Department of the Ministry of Internal Affairs of the Republic of Kazakhstan" (hereinafter referred to as the Police Department) announced 5 lots of public procurement for the purchase of motor vehicles from 2016 to 2021, in which T LLP and T LLP participated.With".
LLP "C" was recognized as the winner for 3 out of 5 lots, and LLP "T" was recognized as the winner for 2 out of 5 lots. Applications for participation in the purchase of LLP "C" and LLP "T" were submitted with the maximum price allocated by the Police Department for the purchase of cars. The victory of LLP "C" and LLP "T" in a particular purchase was due to the conditional discount indicator. The Police Department did not receive any savings from these purchases. LLP "C" is a car manufacturing plant, and LLP "T" is a logistics company.
According to the Internet resource https://thp.kz / "A" and "C" are partners of "T" LLP, that is, it follows that "T" LLP provides "C" LLP with car transportation services. The Department found signs of violation of subparagraph 2) of paragraph 1) of Article 169 of the Entrepreneurial Code of the Republic of Kazakhstan (hereinafter referred to as the Code) in the actions of LLP "T" and LLP "C". In this regard, Department Order No. 9-OD dated March 31, 2022 (hereinafter referred to as the order) ordered an investigation into violations of the legislation of the Republic of Kazakhstan in the field of competition protection, based on violations of subparagraph 2) of paragraph 1 of Article 169 of the Code, which led to an increase, decrease or maintaining prices at auctions, distorting the results of auctions, auctions and contests, including by dividing by lots.
The plaintiffs, disagreeing with the order, appealed to the court with this claim.
Judicial acts:
1st instance: the claim was denied.
Appeal: the decision is upheld.
Cassation: judicial acts are upheld.
Conclusions: By rejecting the claim, the courts legitimately concluded that the established circumstances are sufficient grounds for initiating an audit, while the legislation does not provide for any other actions prior to the start of the audit.
In accordance with subparagraph 3) Paragraph 2 of Article 216 of the Code is based on the receipt by the antimonopoly authority of information on violations of the legislation of the Republic of Kazakhstan in the field of competition protection, which are the detection by the antimonopoly authority in the conduct of its activities in the actions of market entities, government agencies, local executive authorities signs of violations of the legislation of the Republic of Kazakhstan in the field of competition protection.
According to paragraph 1 of Article 218 of the Code, if there is factual data indicating the presence in the actions of a market entity, a state body, a local executive body, an organization endowed by the state with the functions of regulating the activities of market entities, signs of violations of the legislation of the Republic of Kazakhstan in the field of competition protection, established as part of the review of information provided for in paragraph 2 of Article 216 of the Code, The antimonopoly authority issues an order to conduct an investigation.
In accordance with paragraph 1 of Article 224 of the Code, based on the results of an investigation into violations of the legislation of the Republic of Kazakhstan in the field of competition protection, an official of the antimonopoly authority prepares an opinion, on the basis of which the antimonopoly authority makes one of the following decisions on:
1) termination of the investigation of violations of the legislation of the Republic of Kazakhstan in the field of protection of competition on the grounds provided for in Article 223 of the Code;
2) instituting proceedings on an administrative offense and, in the cases established by subitems 1) and 2) of paragraph 1 of Article 226 of this Code, issuing an order;
3) issuing an order to eliminate violations of the legislation of the Republic of Kazakhstan in the field of competition protection;
4) transfer of materials to law enforcement agencies for pre-trial investigation. In turn, the completion of the investigation is considered to be the day when the official (officials) of the antimonopoly authority signs the conclusion on the results of the investigation of violations of the legislation of the Republic of Kazakhstan in the field of protection of competition (paragraph 3 of Article 224 of the Code). The approval of the conclusion based on the results of the investigation of violations of the legislation of the Republic of Kazakhstan in the field of competition protection is issued by the order of the antimonopoly authority within no more than ten working days from the date of completion of the investigation (paragraph 4 of Article 224 of the Code).
According to paragraph 1 of Article 216 of the Code, investigation refers to the activities of the antimonopoly authority aimed at collecting factual data confirming or refuting violations of the legislation of the Republic of Kazakhstan in the field of competition protection, in accordance with the procedure provided for by the Code.
Thus, it follows that the investigation is ordered on the grounds of violation of the legislation of the Republic of Kazakhstan in the field of protection of competition, and the fact of presence or absence is established already during the investigation.
In accordance with subparagraph 8) of Article 90-6 of the Code, the antimonopoly authority is responsible for preventing and suppressing anticompetitive agreements and coordinated actions of market participants and unfair competition.
According to subparagraph 25) of paragraph 15 of the Regulation on the Department of the Agency for the Protection and Development of Competition of the Republic of Kazakhstan (approved by Order No. 1-OD of the Chairman of the Agency for the Protection and Development of Competition of the Republic of Kazakhstan dated October 9, 2020), the functions of the Department include: prevention and suppression of anticompetitive agreements and coordinated actions of market participants, unfair competition; monitoring of purchases of goods and auctions.
In turn, operators of purchases and auctions conducted in electronic form, at the request of the antimonopoly authority, provide permanent access to trading or information systems, commodity exchanges and other trading platforms for electronic purchases of goods or auctions, allowing real-time monitoring of purchases of goods and auctions (paragraph 1), paragraph 7, art. 169-1 The Code).
The plaintiffs' argument that the competence of the antimonopoly authority does not include monitoring for violations of raising, lowering or maintaining prices at auctions, distorting the results of auctions, auctions and tenders, including by dividing by lots, as well as the fact that the investigation was initiated in accordance with the provisions of the Law "On Public Procurement", is unfounded.
In accordance with subparagraph 14) of Article 2 of the Law, public procurement is the purchase by customers of goods, works, and services in whole or in part from budgetary funds and (or) their own income, with the exception of income from international airports related to the provision of services to non-residents of the Republic of Kazakhstan.
According to paragraph 1 of article 19 of the Law, monitoring of public procurement is carried out on the basis of collecting, summarizing, analyzing, systematizing and evaluating information on public procurement. In turn, in accordance with paragraph 2 of Article 19 of the Law, monitoring of public procurement is carried out by the authorized body through the web portal of public procurement and on the basis of the information contained therein.
In this case, the authorized body monitors the purchase of goods, works, and services by customers in whole or in part at the expense of budgetary funds and (or) its own income.
In accordance with the norms of the Code and the Regulations of the Department, the antimonopoly authority monitors the procurement of goods and auctions for violations of the legislation of the Republic of Kazakhstan in the field of competition protection, and not for violations of the Law. The investigation against LLP "C" and "T" was ordered on grounds of violation of subparagraph 2) of paragraph 1 of Article 169 of the Code, and not on grounds of violation of the Law.
The Judicial Board agrees with the conclusions of the local courts, as they correspond to the circumstances established in the case, are made with the correct application of substantive law and its interpretation, based on the evidence provided by the parties, which has been properly evaluated.
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