Probe into price fixing at Russian universities

At a time of economic instability in Russia, the country’s anti-monopoly authority (FAS), together with the general prosecutor’s office, plan to start widespread checks at universities on suspicion of price fixing and unfounded increases in the cost of tuition.

Investigations were started after a petition, sent to regulators by members of the All-Russia People’s Front (ONF) , a movement in Russia created in 2011 by Vladimir Putin to provide United Russia, the country’s ruling party, with ‘new ideas, new suggestions and new faces’.

Lybov Dukhanina, an official spokeswoman for the ONF, said that many Russian universities have significantly increased their tuition fees by 25% and more since the beginning of the year, demanding that students pay fees in foreign currencies. She said the main reason universities are demanding that fees are paid in foreign currencies is down to the economic crisis and devaluation of the ruble caused by western sanctions and Russia’s countersanctions.

This charge of price fixing will be considered by Russia’s lower house of parliament, the Duma, at one of its next sessions. Mikhail Starshinov, a member of the Duma, claimed the fee increases are the result of price fixing, organised by some of Russian leading universities. ‘Such a situation is unacceptable,’ Starshinov says. ‘We are unhappy with the position of officials from the national ministry of education. Moreover, such one-time increases raise questions about price fixing in the market. There is also a need to check the facts of setting costs of tuition in foreign currency.’

At the same time, a spokesman for the analyst center that provides expert support to the Russian government said that the FAS and the government lack the legal means to restrict tuition hikes, which is the prerogative of universities. The situation is aggravated by the private status of a significant proportion of Russia’s colleges and universities.

According to members of the Duma, one possibility being considered is creating a law that will stop tuition fees rising faster than the rate of inflation.  At the same time, Vadim Soloviev, a member of the Duma, said the government may consider freezing the cost of tuition for three years, perhaps even longer.

In the meantime, an official representative of FAS has confirmed the receipt of a petition from the Duma and the ONF and said that checks have begun. Universities found guilty of price fixing could be subject to large fines or have their licence withdrawn.

Sergey Galin, an official spokesman for the Russian Student Union, said that there has been pricing fixing at some Russian universities. However, the union is awaiting the report from the FAS before considering whether to take any action.