Fiber optic shortage gives way to overproduction

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This was stated in a message from the Federal Antimonopoly Service (FAS).

Clouds began gathering over Corning five years ago. In 2019, the FAS opened a case based on a statement from the domestic JSC Optic Fiber Systems, which resulted in Corning Inc and four Russian factories cooperating with it being found to be violators of paragraph 3, part 4, article 11 of the Law on the Protection of Competition.

It was at this time that el salvador whatsapp number database Corning representatives complained to ComNews that, despite the great potential of the Russian market and the ten-year growth in fiber optic sales worldwide, the forecast for Russia (and the CIS at the same time) in 2019 was unfavorable: “In 2019, the market volume of the CIS countries - Russia, Kazakhstan, Belarus - will most likely show a decline compared to 2018 and will amount to less than 7 million km,” Corning representatives said five years ago.

They even showed concern for domestic producers. "In Russia, zero customs duty on optical cable is a serious threat to the Russian cable industry. Russian operators receive a large number of offers for optical cable at a low price from Chinese manufacturers and want to see comparable prices for domestically produced cable," Arina Kornilyeva, regional manager for Eastern Europe at Corning Optical Fiber, told ComNews at the time.

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2019 turned out to be a difficult year for manufacturers of optical fiber and fiber-optic cable (FOC). The fiber shortage gave way to its overproduction. Such data is provided by Corning Inc. 2020 also does not promise anything good for the market, and FOC manufacturers will have to learn to live in a new reality - when all telecom operators expect prices for cable to fall.

According to the FAS, Corning decided to achieve "comparable prices" by colluding with Russian cable factories. The case dragged on for five years, but on January 15, 47,760,018 rubles were received by the budget of the Russian Federation.

Mikhail German, a partner at the Varshavsky & Partners law firm who heads the antitrust practice, told ComNews that the case was delayed due to the company's foreign origin: "Such a long wait between filing a lawsuit and paying the fine is explained by the fact that Corning Inc is an American manufacturer. More time is needed for document flow, because the antitrust service cannot make a decision without a preliminary check. Certain procedures must be followed to exchange documents with foreign companies," the lawyer explained.

FAS representatives did not respond to ComNews' request, but Mikhail German knows from experience how the agency acts against participants in cartel agreements: "I worked with the FAS on cartel investigations and can illustrate the algorithm of its work. The service identified a large manufacturer - and Corning is a well-known supplier and has a large share in the global fiber optic trade - that took advantage of its position on the market. They issued it a fine, but not for a cartel agreement. Most likely, for abuse of a dominant position - the FAS's position here has not been fully disclosed. The cartel agreement will be considered now. Four Russian plants that came under antitrust inspection along with Corning may in the future be charged under Article 11 of the Law on the Protection of Competition - concluding cartel agreements. This may result in not only turnover fines, but also criminal liability - Article 178 of the Criminal Code of the Russian Federation, which provides for punishment up to and including imprisonment," says Mikhail German.