Taxi aggregators are suspected of violating competition

Taxi aggregators are suspected of violating competition

The main taxi aggregators operating in Russia are suspected of price fixing. The Federal Antimonopoly Service will examine the materials following an investigation by EEC antitrust officials. 

In 2021 the EEC found that five aggregators were likely to have coordinated actions that led or could have led to the establishment and maintenance of agreed prices in the market. Among the possible violators are Yandex.Taxi, DiDi, Gett, Citymobil and Bolt. 

The EEC cannot punish the companies, as the violations have been detected on the territory of individual EEU member states and not on the entire cross-border market. If the FAS confirms the commission's conjectures, companies in Russia could face fines of up to 15% of revenue.

The actions of the aggregators led or could have led to setting tariffs in violation of clause 3, Article 76 of the Eurasian Economic Union Treaty, the EEC concluded. The EEC did not disclose specific cases or circumstances of violations.

The commission estimated that more than 700 companies providing taxi ordering services operate in the union countries. But most taxi companies receive their orders through the largest services, which are available in Russia, Armenia, Kyrgyzstan, Kazakhstan and Belarus. These are the Russian Yandex.Taxi and the Estonian Bolt. The latter was operating in our country at the time of the investigation, so it also came to the attention of antimonopoly inspectors.

However, Yandex's legal entities and forms of organisation are different everywhere. In Armenia and Kyrgyzstan the service is provided by Yandex.Taxi (registered in the Netherlands), in Kazakhstan by Yandex.Taxi Corp LLP , in Russia by Yandex.Taxi LLC, in Belarus by UBER ML. The EEC found price coordination by Yandex and Bolt in the markets of these allied countries as well.

The absence of a single legal entity prevented the commission from holding the Yandex as liable. The competence of the EEC extends only to cases where a single commercial or non-commercial entity or individual, rather than a group of individuals, violates competition on the markets of two or more Union states.

The investigation was submitted to the antimonopoly authorities of these countries, including the Russian FAS. The Federal Antimonopoly Service told Izvestia that it has received the EEC investigation materials and they are currently being analyzed.

The EEC investigation assessed the state of competition in the taxi ordering market from 2018 to the second quarter of 2021. Public offers, contracts, agreements and the companies' own responses to the commission's enquiries were examined.

The EEC also conducted a survey of market participants (318 companies, 95 of them are Russian). It turned out that 65.5% of taxi fleets and drivers would leave the services of aggregators if the service would raise the fee by 5-10%. Most of them (54%) would go back to getting their orders from a dispatcher. According to the EEC, the survey proved that in addition to aggregators there are also dispatching services in the market and they should also be included in the boundaries of the commodity market of taxi ordering services. According to Izvestia's source among aggregators, the FAS does not take them into account when carrying out such analysis.

Three of Izvestia's sources in the Russian aggregators said that the companies did not agree with the conclusions of the EEC investigation. DiDi and Citymobil said they had not yet read them. DiDi added that its service operates in accordance with the law and market regulation. A representative of Yandex.Taxi declined to comment. The press offices of Bolt and Gett did not respond to enquiries.

According to Pavel Ikkert, managing partner of the Ikkert & Partners law company, Russian law prohibits restricting competition under Article 11 of the Federal Law "On Protection of Competition".

Now, if FAS will recognizes any signs of violation, aggregators can issue a warning, initiate an administrative case against them followed by a breakdown of price dynamics for services, issue an order to eliminate violations, if any, and impose a turnover-based fine, ranging from 1 to 15% of revenue. In the case of large aggregator companies,the fine may amount to billions of roubles.

But, as Pavel Ikkert adds, the service may not agree with the commission's findings or with the presence of any violations in the Russian market in particular.

Alexei Stankevich, a partner of the Orchards law company, believes that the violations cannot be automatically equated with price-fixing until the FAS itself admits it.

Russian antitrust law distinguishes between economic coordination and price-fixing. And according to common practice, including the practice of the FAS, setting maximum or recommended prices does not constitute coordination of economic activities.

Photo:, IZVESTIA / Konstantin Kokoshkin

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