At the end of August 2016, the Federal Antitrust Service of Russia (“FAS”) completed inspection of a leading global paper manufacturer.

The FAS showed interest in this market for a reason. Back in 2015, the FAS started a large-scale inspection of paper product manufacturers in response to the overpricing of paper. The reason for the inspection was a significant rise in the price of offset paper. Representatives of the sector note that since the beginning of 2015 the price of newsprint paper increased by 10‑15%, depending on the quality and volume of the order.

The Russian Government from time to time raised discussions during meetings regarding carrying out these inspections. In 2015, the minister for Telecom and Mass Media of Russia A.N. Nikiforov at an official meeting with the chairperson of the Russian Government D.A. Medvedev noted that a sharp growth of prices for paper could lead to a crisis of the Russian printed mass media.

In the course of a series of inspections, the FAS detected violations of the competition law among major manufacturers of paper products that eventually affected the decision of the authority to inspect all other market participants as well.

Our client as one of the most significant market participants was included in the FAS’ schedule of inspections. The company turned to Capital Legal Services for assistance during such scheduled inspection.

The antitrust practice team provided legal support for the manufacturing company during the entire period of antitrust inspection. In order to detect and reduce possible risks, associates of Capital Legal Services performed preliminary antitrust due diligence of the client’s activity. Based on the results of the due diligence, Capital Legal Services associates developed an action plan to minimize risks, which was afterwards implemented by the client. As a result, it was reported that the company's activity was recognized as being in compliance with the requirements of the antitrust legislation and in line with procompetitive practices.