MegaFon won a three-year lawsuit with the Federal Antimonopoly Service (FAS) regarding the increase in prices for SMS mailings. At the same time, the court agreed with the conclusion of the FAS that the mobile operator illegally creates preferences for state-owned banks when setting prices for SMS mailings.
MegaFon won litigation with FAS
The Ninth Arbitration Court of Appeal overturned the decision of the lower court on the suit of the mobile operator Megafon against the Federal Antimonopoly Service (FAS). Back in 2019, the Federal Antimonopoly Service recognized MegaFon and three other cellular operators of the Big Four – VimpelCom (Beeline trademark), Mobile Telesystems (MTS) and T2 Mobile (Tele2 trademark) – violators antitrust laws.
The violation was expressed in a multiple increase in prices for SMS-mailings and the establishment of uneven tariffs for this type of service for state and commercial banks. A complaint about this was filed by the non-profit partnership “National Council of the Financial Market” (NP NSFR).
Megafon won a three-year lawsuit with the Federal Antimonopoly Service regarding the increase in prices for SMS mailings
During the hearings on this complaint, the FAS found that Megafon had a 500% increase in prices for SMS mailings, VimpelCom had 200%, MTS had 120%, and Tele2 had 80%. Another circumstance also turned out: rates for SMS mailings for state-owned banks (Sberbank and Pochta-Bank) can be ten times cheaper than for commercial ones.
As a result of the hearings, the Federal Antimonopoly Service ordered mobile operators to cancel the increase in tariffs for SMS mailings. Cellular operators, for their part, did not agree with this verdict and went to court. NP NSFR and Russian Standard Bank were involved in legal proceedings on the side of the FAS. The Moscow Arbitration Court rejected the claims of Vimpelcom, MTS and Tele2. These decisions were confirmed by the courts of appeal and cassation.
Megafon, on the other hand, won the trial in the first instance. This decision was confirmed by the Ninth Arbitration Court of Appeal. However, the cassation instance, the Arbitration Court of the Moscow District, in March 2020 returned the case for a new trial to the court of first instance.
In February 2021, the Moscow Arbitration Court dismissed Megafon’s claim during a retrial. But “MegaFon” and its “daughter” “Megalabs” appealed to the appellate court. During the proceedings in the Ninth Arbitration Court of Appeal, MegaFon’s request for an accounting and financial and economic expertise was granted.
Dispute about the need for an examination
The examination was to be carried out by the Center for Forensic Expertise under the Ministry of Justice. The experts were asked questions about the economic feasibility of MegaFon’s tariffs for SMS-mailing services and state-owned banks. However, the FAS, Russian Standard and the National Financial Markets Service objected to the examination and filed a corresponding complaint with the cassation instance.
The Arbitration Court of the Moscow District agreed that there was no need for an expert examination. But Megafon filed a complaint with the Supreme Court, which agreed with the operator’s arguments about the need for an examination. After the examination, the consideration of the case was returned to the Ninth Arbitration Court of Appeal, which has now made a new decision on the case.
In what the court supported the FAS, and in what MegaFon
The details of the verdict are unknown: the meetings were held in a closed decision and the texts of the relevant court decisions are not published.
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The press service of the Federal Antimonopoly Service explained to CNews that the court invalidated the prescription of the Federal Antimonopoly Service only regarding the establishment by MegaFon of monopoly high prices for SMS mailings.
In another part of the FAS order regarding the creation of discriminatory conditions in the formation of tariffs for SMS mailings for commercial banks, the court agreed with the opinion of the antimonopoly service. At the same time, the Federal Antimonopoly Service intends to appeal the court’s decision in the part that concerns the establishment by MegaFon of monopoly high prices for SMS mailings. The press service of Megafon declined to comment.
Not the first victory of mobile operators over FAS
This is not the first case between the Federal Antimonopoly Service and mobile operators over tariffs for SMS mailings, and last time the mobile operators were also able to prove their case in court.
As early as 2015, changes aimed at combating SMS spam came into force in the legislation. After that, cellular operators changed the principle of working with SMS aggregators. Until then, the aggregator received a discount based on the total volume of SMS sent by its customers. In 2015, mobile operators switched to a per-account billing model: they began to identify each end customer of mailings and set a discount based on the volume of SMS sent by each customer.
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As a result, in 2014-2015. the cost of mailings through the MTS network increased by 177%, through Megafon – by 116%. In 2017, the Federal Antimonopoly Service ordered all four cellular networks to eliminate this violation and return to the previous model of tariffication of SMS mailings. However, VimpelCom and Tele2 successfully challenged this order in court, and it was canceled.