A Q&A guide to competition law in Ukraine.
The Q&A gives a high level overview of merger control, restrictive agreements and practices, monopolies and abuse of market power, and joint ventures. In particular, it covers relevant triggering events and thresholds, notification requirements, procedures and timetables, third party claims, exclusions and exemptions, penalties for breach, and proposals for reform.
To compare answers across multiple jurisdictions visit the Competition law Country Q&A tool.
This Q&A is part of the PLC multi-jurisdictional guide to competition and cartel leniency. For a full list of jurisdictional Competition Q&As visit www.practicallaw.com/competition-mjg.
For a full list of jurisdictional Cartel Leniency Q&As, which provide a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities in multiple jurisdictions, visit www.practicallaw.com/leniency-mjg.
Mergers and acquisitions, as well as establishment of an undertaking and appointments to corporate positions under certain circumstances, are subject to merger control in Ukraine.
Applicable laws and regulations include the:
Law of Ukraine on Protection of Economic Competition of 2001 (Competition Law).
Law on the Antimonopoly Committee of Ukraine of 1993 (Law on the AMC).
Commercial Code of Ukraine of 2003.
AMC Resolution Approving the Regulation on the Procedure for Filing Applications with the Antimonopoly Committee of Ukraine for Obtaining its Prior Approval of the Concentration of Undertakings of 2002 (Concentrations Regulation).
AMC Methodology for Establishment of the Monopoly (Dominant) Position of the Undertakings on the Market of 2002 (Monopoly Methodology).
The AMC is the primary state authority entrusted with ensuring protection of competition. In particular, it has powers to investigate and grant or refuse clearance for mergers (concentrations). If the AMC refuses to approve a concentration, the Cabinet of Ministers of Ukraine (CMU) may overrule that decision (see Question 7).
See box, The regulatory authority.
The Competition Law sets out the exhaustive list of transactions/events that are considered concentrations and may require prior merger clearance:
Merger of previously independent undertakings or the takeover of one undertaking by another.
Acquisition of direct or indirect control over an undertaking (including through the acquisition of a significant part of the assets of an undertaking, appointment of its managers and so on).
Establishment by two or more undertakings of a new undertaking that will independently pursue business activity on a lasting basis and its establishment will not result in co-ordination of competitive behaviour of either:
the new undertaking, on the one hand, and its parents, on the other.
Direct or indirect acquisition(s) of control over participation interests whereby certain thresholds (25% or 50% of the votes in the highest governing body of the undertaking concerned) are reached or exceeded.
The limitation period for the authority to take action in relation to mergers is five years after the merger has been completed.
A concentration is notifiable and requires prior approval of the AMC if all of the following thresholds are exceeded (Competition Law):
The combined worldwide asset value, or turnover of the participants of the concentration (for the purposes of this chapter participants of the concentration are considered as part of their corporate group), in the financial year preceding the year of the transaction, exceeded EUR12 million.
Each of the parties to the concentration had worldwide asset value or turnover in the financial year preceding the year of the transaction in excess of EUR1 million.
The value of assets located in Ukraine, or Ukrainian turnover of either of the parties to the concentration, in the financial year preceding the year of the transaction exceeded EUR1 million.
There is also a market share test, which applies independently. AMC clearance is required if either individual or combined market share of the parties in the market concerned or the adjacent market exceeds 35%.
See Question 39 in relation to proposed changes.
The parties to the concentration must obtain the AMC approval of the notifiable concentration before closing (see Question 2).
The law does not set any specific deadlines for filing a notifiable concentration, the only requirement being that the AMC approval be obtained before the implementation of the concentration (for example, transfer of the title to shares, acquisition of control or registration of a new entity).
Parties to a transaction may refer to the AMC for formal guidance on whether the concentration is notifiable, or whether the clearance is likely to be granted or refused. Such guidance is issued in the form of a non-binding preliminary opinion. Informal discussions with the AMC's officers are usually possible, although the law does not expressly provide for this.
The parties to a transaction are jointly responsible for notifying. However, the AMC may agree to accept a notification filed by one of the parties in the following circumstances:
In case of a hostile takeover.
If there is a lack of co-operation between the parties to a concentration in relation to filing the notification in Ukraine (recently, the AMC has been increasingly reluctant to accept notifications filed by one of the parties with reference to this circumstance).
The AMC is the relevant authority. However, if the AMC prohibits the concentration, it may still be approved by the CMU (see Question 7).
The parties must submit a written notification in the form and with the contents and annexes required under the Concentrations Regulation. Some information regarding the transaction and the parties must also be submitted in electronic form using special software developed by the AMC for that purpose.
The filing fee is UAH5,100 per one notifiable event (there may be multiple events depending on the transaction structure).
The parties must suspend implementation of the transaction until AMC clearance is granted. In addition, they must refrain from any actions that may restrict competition and make restoration of the initial state of affairs impossible (for example, through pre-clearance "gun-jumping").
The merger review procedure includes the following steps:
Preview period. The AMC cursorily reviews the notification and decides whether it is complete and can be forwarded for the substantive review (Phase I). If the AMC considers the notification to be incomplete, the notification is rejected and should be resubmitted. The AMC has 15 calendar days to make a decision.
Phase I review. This stage involves a substantive review and assessment by the AMC of whether the concentration can be approved or whether there are potential grounds to prohibit the concentration or conduct an in-depth review, in which case Phase II is initiated. The assessment must be completed within 30 calendar days following acceptance of the notification for substantive review.
Phase II review. Phase II review involves a close analysis of the transaction and the associated competition concerns, examination of expert opinions and other additional information. Although the review period is limited to three months from the AMC's decision to initiate a Phase II review, in practice it may take longer if additional documents, information and/or expert evidence are required (the relevant AMC requests may stop or even restart the clock).
For an overview of the notification process, see flowchart, Ukraine: merger notifications.
The AMC can (but is not required to) disclose certain general information on the transaction and the parties, the nature of the transaction, the relevant markets, and so on. The authority can also publish (usually on its website) other information regarding the transaction to the extent it was not marked confidential by the parties (and the relevant confidentiality request is satisfied by the AMC) (see below, Confidentiality on request). The AMC tends to make public those investigations which are likely to attract public attention, comments, and opinions.
In addition, under the Law on Access to Public Information enacted in 2011, the AMC must also disclose its decisions (except for the parties' confidential information). So far, this provision has been implemented by the AMC through publishing short announcements regarding its decisions and major investigations. To the authors' knowledge, with a view to implementing this provision, the AMC has also adopted an internal regulation on dealing with third party document requests (except for the information marked as confidential by the parties).
On the receipt of a merger notification, the AMC can disclose general information on the transaction and the parties involved if either:
The authority believes that third parties may object to the transaction.
Phase II review is initiated (see Question 4).
The AMC must also disclose its decisions under the Law on Access to Public Information (see above, Publicity).
On issuing a decision, the AMC can disclose other information regarding the transaction and/or the parties within the scope agreed with the parties to the concentration.
Automatic confidentiality does not apply to any information.
Merger filings submitted with relevant confidentiality marks are treated by the AMC as confidential and cannot be disclosed to the public except with the express written consent of the parties to the concentration or as outlined above. The AMC may require the parties to justify why confidentiality is claimed over a particular piece of information contained in the notification and, if not satisfactorily substantiated, the parties' confidentiality request may be rejected (see above, Procedural stage).
Third parties (for example, competitors) can be involved during the Phase II review if the notified transaction may significantly affect their rights and interests. The decision on their involvement is made by the AMC at its discretion.
Third parties participating in an investigation have the right to access case materials, except for the data with restricted access (confidential information) and/or other information, disclosure of which may infringe on the interests of the other parties involved in the case or hinder further review of the case.
Third parties can submit their observations relating to, among other things, the notified transaction and its impact on the market. The AMC must take these observations into account when deciding on the case.
The AMC approves the concentration if it does not lead to monopolisation or substantial restriction of competition on the Ukrainian market or a significant part of it.
Even if the AMC prohibits the concentration, the CMU may still permit it if its positive effects for the public interest outweigh the negative impact of the restriction of competition, unless such restriction:
Is not necessary for achieving the purpose of the concentration.
Jeopardises the market economy system.
The AMC clearance decision can be made conditional on the parties' undertaking to perform, or refrain from performing, certain actions. The undertakings aim to remove or mitigate the negative impact of the concentration on the market competition and may be either structural (for example, divestitures) or behavioural (for example, a prohibition of unjustified price increases).
Remedies and the relevant procedures are not comprehensively regulated by the Ukrainian laws and are usually negotiated with the AMC on a case-by-case basis. Although remedies may be offered at any time after the submission of the merger notification, in practice, remedies are usually offered and discussed during Phase II (see Question 4).
Remedies normally cannot be accepted to prevent the initiation of Phase II review or to obtain a conditional Phase I clearance. Once the AMC identifies competition concerns, procedurally it is required to open Phase II.
Failure to notify can lead to a fine in the amount of up to 5% of the company's turnover in the year immediately preceding the year when the fine is imposed. The law is silent on whether turnover refers to local or global turnover. The AMC currently interprets this as a reference to the worldwide turnover.
The fine can be imposed on the entire corporate group of the company whose actions or omissions have led to violation of the Competition Law. This allows the AMC to fine immediately any local subsidiaries of the parties to the concentration and improves the AMC's chances of the successful collection of fines.
The late payment fee is 1.5% per day, but cannot exceed the principal amount of the fine imposed.
In addition to the financial penalties, parties may be subject to any or all of the following sanctions may apply:
Ban on the companies' cross-border activities with Ukraine such as importing/exporting goods, performing under cross-border contracts and so on, if the parties refuse to pay the imposed fine. This can be imposed by the Ministry of Economy of Ukraine at the AMC's request.
Third party damages claims (see Question 25).
Invalidation of the transaction.
As regards notifying incorrectly, the following may lead to a fine of up to 1% of the infringer's turnover in the year immediately preceding the year when the fine is imposed:
Failure to provide requested information within the period specified by the AMC.
Provision of incomplete information.
Submission of false information to the AMC.
There is no criminal or administrative liability for individuals, except that a state official may incur a nominal administrative fine if he fails to provide information to the AMC as required by law (for example, in the context of a merger filing made by a state authority).
The law also envisages personal administrative liability of company's officers interfering with AMC's investigations, but an efficient mechanism for implementation of this norm is yet to be created.
Implementation before approval entails virtually the same liability as failure to notify at all. In practice, however, closing a non-problematic transaction before clearance but after the filing was made receives a more favourable treatment by the AMC than an omission to file.
Failure to observe the AMC decision prohibiting a concentration, or only partial compliance with it, may result in a fine of up to 10% of the party's turnover in the year immediately preceding the year when the fine is imposed. Failure to observe the AMC decision that imposes certain obligations on the parties to the concentration may result in a fine of up to 5% of their turnover in the year immediately preceding the year when the fine is imposed. The fine may be based on the global turnover of the infringing party (see above, Failure to notify correctly).
In addition, the CEO (or a top manager) of the infringing party may be subject to a nominal administrative fine for failure to implement the AMC decision or its untimely implementation.
See Question 39 in relation to proposals to strengthen enforcement.
The AMC decision can be appealed by the parties or third parties within two months following the receipt of the decision. It remains uncertain whether administrative or commercial courts have jurisdiction over appeals. As a matter of practice, commercial courts usually assume jurisdiction and render a final judgment.
Generally, the court can suspend the AMC decision until the final judgment is rendered. However, to protect the public interest or prevent the possible negative impact of the violation(s), the AMC can declare that the decision cannot be suspended.
Third parties can appeal an AMC decision (see above, Rights of appeal and procedure).
Restrictive provisions, including ancillary restraints, are not automatically covered by the AMC merger clearance decision. They usually qualify as concerted practices (see Question 13) and require a separate anti-trust clearance.
Generally, no industry is specifically regulated, although some industry-specific requirements may apply (for example, special rules for calculation of thresholds for banks and insurance companies).
Restrictive agreements and practices may qualify as anti-competitive concerted practices (that is, practices which resulted or may result in prevention, elimination or restriction of competition). There is a general prohibition of anti-competitive concerted practices, unless an exemption applies (see Question 15).
Anti-competitive concerted practices are subject to administrative sanctions under the Competition Law. In addition, third parties that sustained damage as a result of such violations, may claim damages (see Question 25). There is no criminal liability for these violations.
In addition to the Competition Law, the regulatory framework includes the:
Law on the AMC.
AMC Resolution on the Procedure for Filing Applications with the AMC for Obtaining its Approval of the Concerted Practices of the Undertakings of 2002 (Concerted Practices Regulation).
AMC Resolution on the Standard Requirements to Concerted Practices of the Undertakings for their General Exemption from the Requirement to Obtain Prior AMC Clearance of 2002 (General Exemption Regulation).
AMC Resolution on the Standard Requirements to Concerted Practices of the Undertakings concerning Specialisation of Production of 2008 (Specialisation Regulation).
Regulation on the Procedure Application of Leniency of 2012 (Leniency Regulation).
Concerted practices are defined as follows (Competition Law):
Agreements in any form (including verbal arrangements and networks of agreements).
Decisions of associations of undertakings.
Any co-ordinated practices (actions or omissions) of the undertakings.
Establishment of an undertaking or an association (or entry into an association) aiming at, or resulting in, the co-ordination of the competitive behaviour of the:
undertakings that established a new undertaking or an association; or
undertakings that established a new undertaking or an association, on the one hand, and the new undertaking, on the other.
Anti-competitive concerted practices include (Competition Law):
Fixing prices or other purchase or sale conditions.
Limiting production, markets, technological development or investment, as well as assuming control thereof.
Dividing markets or sources of supply according to territory, type of goods, sale or purchase volumes, or classes of sellers, buyers or consumers.
Distorting the results of trading, auctions, competitions or tenders.
Ousting other companies from the market or limiting their market access.
Applying different conditions to identical agreements to put a specific company at a disadvantage.
Executing agreements that are conditional on the contracting party's acceptance of additional obligations unrelated to the subject of the agreement.
Substantially limiting the competitiveness of other companies without justifiable reasons.
Parallel behaviour (actions or omissions) which resulted or may result in the prevention, elimination or restriction of competition is also considered a violation, unless there are objective reasons for this behaviour.
The regulations apply to agreements and other concerted practices irrespective of their form. The following are covered:
Formal written agreements.
Informal verbal arrangements.
Other concerted practices, including, in certain circumstances, parallel behaviour (see Question 13).
Any agreements involving anti-competitive concerted practices are presumed to violate the law (for example, price-fixing or market sharing arrangements).
The AMC may authorise (grant an individual exemption to) certain potentially anti-competitive concerted practices if both (Competition Law):
The parties can prove that these practices encourage manufacturing, technological or economic development, or other efficiencies.
The practices do not lead to a substantial restriction of competition.
In exceptional circumstances the CMU can allow concerted practices (unless the restriction of competition poses a threat to the market economy system) that have not been approved by the AMC if the parties can show that the positive effects of these practices for the public interest outweigh the negative consequences of the restriction of competition.
In addition to the possibility of obtaining an individual exemption from the AMC, the following block exemptions exist (General Exemption Regulation):
De minimis exemption, applicable where the aggregate market share of the parties (including their respective corporate groups) in any of the product markets concerned is less than 5%.
Market share-based exemption, applicable to vertical or conglomerate arrangements where the parties' combined market share is below 20%, and to horizontal and mixed arrangements where the parties' combined market share is below 15%, provided all of the following conditions are met:
neither of the parties is a dominant undertaking (or a monopoly) and has exclusive privilege rights;
the aggregate worldwide turnover or assets value of the parties (including their respective groups) did not exceed EUR12 million in the preceding financial year;
the aggregate worldwide turnover or assets value of at least two undertakings which belong to the parties' groups did not exceed EUR1 million in the preceding financial year; and
the aggregate turnover or assets value in Ukraine of at least one undertaking which belongs to either party's group did not exceed EUR1 million in the preceding financial year.
If the parties are at least potential competitors, the above general exemptions do not apply to horizontal or mixed hard-core restrictions, including:
Territorial, customer or supplier and other market sharing.
Restrictions on (including imposing an obligation to refrain from) production or distribution of products.
Distortion of the results of trading, auctions, competitions or tenders.
Specialisation exemption. The Specialisation Regulation provides a block exemption for horizontal arrangements contemplating concentration of the undertakings' efforts and resources in the production (distribution) of certain products which result in the improvement (rationalisation) of production, acquisition or distribution of the products, unless one of the following applies:
Either of the undertakings holds a dominant position (or is a monopoly).
Their combined market share on any of the markets concerned exceeds 25%.
The specialisation arrangement results in output limitation, market sharing or similar, or its term exceeds five years.
In particular, the following actions are permissible:
Discontinuing production of identical or similar products.
An agreement to produce/sell agreed products only jointly.
Refraining from supplying/acquiring the agreed products to/from competing undertakings.
Keeping minimum stock of the agreed products.
R&D exemption. In late 2012 the AMC enacted a Regulation exempting joint R&D and/or development and engineering works from the requirement to obtain prior AMC clearance. The exemption applies when the combined market share on the parties on the relevant market does not exceed 25% and the parties meet a set of other criteria (equal access to the results of the R&D activity).
Exemption for associations. The Associations Regulation exempts the establishment of business associations from prior AMC clearance if certain conditions are met, including that:
The association have a contractual basis (not be a legal entity).
The association's participants not gain profit from the association's activities.
The association be financed solely from contributions made by its participants, donations and so on.
The association can only co-ordinate some of its participants' activities (their organisational, educational, and informational aspects, for example, organisation of seminars or educational programmes or the like, or serving as a forum for industry-specific discussions) without interference with their business activities.
There be no limitations on entry and exit.
The association not engage in any entrepreneurial activity.
In 2012 the AMC amended the Associations Regulation expanding the list of allowed financing sources and improving the permitted information collection and exchange procedures among the participants of an association.
The prohibition of anti-competitive concerted practices does not apply to the (Competition Law):
Concerted practices of small or medium-sized undertakings concerning the joint acquisition of products.
Concerted practices in relation to the supply and use of products that limit:
use of products supplied by the imposing undertaking or use of products of other suppliers;
purchase of other products from other suppliers or sale of such other products to other undertakings or consumers;
purchase of products that, due to their nature or trade custom and other fair business practices, are not related to the subject matter of the relevant agreement (tying); or
price formation or establishment of other contractual terms and conditions for selling the products supplied by the imposing undertaking to other undertakings or consumers.
However, this exception does not apply if the restrictions:
result in substantial restriction of competition on the market;
limit other undertakings' access to the market; or
result in economically unjustified price increases or product shortages.
Agreements concerning the transfer of intellectual property rights (IPRs) if such agreements contain certain allowed limitations on the economic activities of the transferee, particularly on the:
scope of transferred rights;
period and territory of permitted use of the IP;
type of activity, application, and the minimal production volume.
For the de minimis exemption, see Question 15, General Exemptions.
The statute of limitation in relation to restrictive agreements and practices is five years as of the moment when the infringement was terminated. The statute of limitation is suspended for the duration of the AMC's investigation of the alleged infringement.
Implementation of an anti-competitive concerted practice which is not covered by a block exemption or other exclusion is prohibited, unless the transaction is individually cleared by the AMC before the implementation.
Similarly to mergers, the parties to a transaction can refer to the AMC for formal guidance on whether a concerted practice requires an individual AMC clearance or whether the clearance is likely to be granted or refused. Informal discussions with the AMC's officers are also possible, although the law does not expressly provide for it.
The parties are jointly responsible for notifying.
The AMC is the relevant authority. However, the CMU may approve a concerted practice even if the AMC has refused clearance (see Question 15, Individual exemption).
The parties to a concerted practice must submit a written notification in the form and with the contents and annexes as set out in the Concerted Practices Regulation. Similarly to merger notifications, some information must also be submitted in electronic form.
The filing fee is UAH2,550.
The AMC can launch an investigation:
On its own initiative based on the available information, market research and so on.
If requested by other businesses or individuals.
If requested by governmental or local authorities.
Third parties can file a complaint with the AMC if they believe that certain arrangements/practices on the market may be anti-competitive. The AMC can start an investigation based on the third party complaint.
A complainant and third parties can be involved in the investigation as third parties if their rights and interests may be significantly affected by the AMC decision. The decision on their involvement is made by the AMC at its own discretion.
Third parties can submit their written and oral observations, and provide evidence.
Third parties can access case materials, except for confidential information and any other information the disclosure of which may violate the interests of other parties involved in the investigation. In addition, third parties can obtain copies of the AMC decision in relation to the case.
Third parties can submit their observations relating to, among other things, the notified transaction and its impact on the market. The AMC must take these observations into account when deciding on the case.
There are no clear legislative guidelines for the investigation and the AMC is vested with a significant degree of discretion in this regard. Particularly, there is no fixed period within which an investigation must be accomplished, and the AMC can repeatedly request documents and information, and reconsider the evidence collected.
The entire investigation can be usually divided into the three main stages:
Collection of evidence, its analysis, and preparation by the AMC of the preliminary submission on whether certain conduct qualifies as a violation of competition laws.
Consideration of the preliminary submission and, as the case may be, relevant objections and comments of the parties to the investigation. This is followed by either:
the adoption of the final decision; or
the referral of the case for additional investigation, with the subsequent adoption of the final decision.
Alternatively, the AMC may close the investigation without deciding on the merits, in particular, if the alleged offence has not been proven.
Internal appeal of the decision with the AMC.
During the investigation the AMC may issue the so-called recommendations aimed at prevention/rectification with respect to the alleged offence and close the case without finding the parties to be in violation of the law.
In practice, investigations by the AMC usually last more than six months.
Information concerning investigations can be made public, although the AMC is not statutorily required to do so (see Question 5, Publicity).
Automatic confidentiality does not apply to any information.
Confidentiality may be available to the parties of an investigation on request (unless the AMC questions treatment of such information as confidential and the parties fail to duly substantiate why it should be so treated).
When investigating potentially restrictive agreements or practices, the AMC can:
Request information, explanation, materials and other data from the undertakings whose actions are being investigated.
Request oral and written explanation from the undertakings whose actions are being investigated, third parties, officials and individuals.
Request expert opinions.
Seize and retain evidence (for example, documents and objects).
Ukrainian competition laws do not provide for an official procedure to reach settlements in an investigation. However, fines may be reduced through co-operation and negotiation with the AMC (for example, by agreeing to fully co-operate and to take actions mitigating adverse effects of an infringement).
With respect to a prohibited restrictive (anti-competitive) agreement or practice the AMC can, in particular:
Issue an individual clearance decision on the parties' application for approval of the agreement/practice. The decision can be conditional or unconditional, and limited or unlimited in time.
Prohibit a notified or investigated agreement/practice and impose sanctions (fines).
Issue an order to bring an infringement to an end.
Issue an order to eliminate the consequences of an infringement.
Repeal its earlier clearance decision if the parties to the agreement/practice impose on certain undertakings such restrictions that generally are not imposed on other undertakings, or apply unequal terms.
Once the violation is established, the parties to a prohibited agreement/practice can be fined up to 10% of their turnover in the year immediately preceding the year when the fine is imposed. For further details on fines and late payment, see Question 9.
In addition to the financial penalties, the parties may face any or all of the following:
Ban on the companies' cross-border activities with Ukraine (see Question 9, Implementation before approval or after prohibition).
Third party damages claims (see Question 25).
Invalidation of the transaction (see below, Impact on agreements).
There is no personal criminal or administrative liability other than as discussed under Question 9, Failure to notify correctly.
The Competition Law provides for a possibility to apply for full immunity and there is a leniency procedure set out in the Leniency Regulation adopted by the AMC in late 2012. The applicant must meet the following cumulative criteria to benefit from full immunity:
Be the first party to voluntarily inform the AMC of the violation (initiators of anti-competitive practices cannot apply for immunity).
Provide the AMC with information of essential importance for making the decision on the case.
Provide all available evidence and/or information concerning the violation.
Take effective measures to cease its participation in the anti-competitive practices.
The Leniency Regulation further details the requirements to leniency applicants, types of information and evidence an undertaking should provide for its application to be successful, filing mechanics and review procedure, among others.
Anti-competitive agreements are not void per se; rather they can be invalidated by the court on the AMC's initiative. Further, the AMC may issue an order requesting the parties to discontinue a violation which will effectively prohibit the parties from implementing an anti-competitive agreement.
The parties to a restrictive agreement or practice may be exposed to damages claims by third parties. Third parties that sustained damage as a result of an anti-competitive practice can seek to recover the damages suffered in court. The amount of compensation can be up to twice the amount of the actual damage sustained.
There are no special procedures or rules.
Although class actions are theoretically available, the procedural framework is underdeveloped, which makes them inefficient.
This is the same as for mergers (see Question 10).
Monopolies and abuses of market power are regulated under competition law, which is administrative in nature. The principal law governing these issues is the Competition Law. The AMC is the state authority primarily responsible for prevention and investigation of the infringements involving companies holding a dominant position.
An undertaking holds a dominant position on the market if it (Competition Law):
Has no competitors on the market.
Does not face significant competition on the market due to, among other things, the other market players' limited access to raw materials and distribution channels, existence of entry barriers and certain privileges.
An undertaking is presumed to enjoy a dominant market position if it holds a market share in excess of 35%, unless it can prove significant competition on the part of the other market players (a rebuttable presumption). An undertaking with a smaller market share may also be considered dominant if there is no significant competition due to the comparatively small market shares of its competitors. (See Question 39 for proposed changes.)
Several undertakings may also be deemed to collectively enjoy a dominant position on the market (collective dominance) if either:
The combined market share of three or fewer undertakings exceeds 50%.
The combined market share of five or fewer undertakings exceeds 70%.
A detailed procedure of determination of the product and geographical definition of the market, as well as calculation of the relevant market shares, is set out in the Monopoly Methodology.
The following practices are regarded as abuses of a dominant market position:
Setting such prices or conditions which could not have been established in a considerably competitive market environment.
Applying different prices or conditions to identical agreements without justifiable grounds.
Imposing contractual conditions that have no connection to the subject of the agreement.
Limiting production, markets or technological development in a manner that may cause harm to other companies or customers.
Refusing to purchase or sell goods in the absence of other sources or distribution channels.
Substantially limiting the competitiveness of other companies without justifiable grounds.
Hindering market access for companies, or ousting them from the market.
The list is not exhaustive; it simply shows the AMC's approach to the determination of the abuses of a dominant market position.
There are no exclusions or exemptions.
As abuses of dominant position are anti-competitive and automatically prohibited, there is no notification requirement in relation to such conduct. It is, however, possible to obtain guidance from the AMC (in the form of a non-binding recommendation) as to whether certain actions or omissions may qualify as abuse of dominance.
These are the same as for restrictive agreements and practices (see Question 22).
In relation to fines, see Question 24, Fines.
Once the violation is established, the AMC can also request a mandatory division of a dominant undertaking unless:
The division is impossible from an organisational or territorial point of view.
There are strong technological links among the undertakings or their units.
This is the same as in relation to prohibited restrictive agreements or practices (see Question 25).
There is no formal legal definition of a joint venture. Nor are joint ventures subject to any special treatment.
Under the Competition Law a joint venture may be considered a concentration or concerted practice, in which case the relevant general rules apply.
A joint venture is considered a concentration if it meets the following criteria:
It is established by two or more independent undertakings.
It can independently pursue business activity on a lasting basis.
Its establishment does not result in co-ordination of competitive behaviour of the joint venture's parents or the joint venture, on the one hand, and its parents, on the other.
Establishment of such a joint venture requires prior AMC clearance if the thresholds referred to in Question 2 are met.
A joint venture is considered a concerted practice if it is established with an objective of, or results in, co-ordination of competitive behaviour of the joint venture's parents or the joint venture, on one hand, and its parents, on the other. Establishment of such joint venture requires prior AMC clearance if it results or may result in prevention, elimination or restriction of competition.
The AMC most actively co-operates with the CIS competition authorities within the Interstate Council for Antimonopoly Policy. The Council functions as a forum for information exchange and co-ordinates reform in the area.
The AMC also co-operates with other competition authorities based on bilateral (for example, with Bulgaria, Hungary and Latvia) and multilateral treaties, as well as with the international organisations (for example, Organisation for Economic Co-operation and Development (OECD), United Nations Conference on Trade and Development (UNCTAD) and the International Competition Network (ICN)).
The main proposals for competition law reform concern the following:
Dominance and merger control. A new draft law aiming to amend merger control thresholds, as well as introducing some further major modifications to the Competition Law was submitted to the Ukrainian Parliament in September 2011. The most important changes are:
overhauling and simplifying the definition of dominance to refer to an undertaking's market share in excess of 50% coupled with absence of significant competition that it suffers;
removing from the requirement to obtain merger clearance such triggering event as reaching or exceeding 25% of voting stock in an undertaking; and
increasing the merger control thresholds and setting a higher standard for the local nexus requirement, as follows:
combined worldwide assets value or turnover of the parties in excess of EUR50 million and local assets value or turnover of at least two of the parties in excess of EUR4 million; or
local assets value or turnover of at least one party in excess of EUR50 million and worldwide assets value or turnover of at least one other party in excess of EUR50 million.
The last proposed change follows an earlier draft law which was prepared for the Parliament's second reading as early as 2009, but has not progressed further since then. The new draft law is expected to be reviewed by the legislator in 2012.
Enforcement. Another AMC legislative initiative amending the Competition Law is aimed at a more efficient enforcement, in particular in relation to the imposition and collection of fines. The draft law suggests introduction of the joint and several liability of all members of the violator's corporate group. If the amendment is adopted, the AMC will be in a position to file a claim seeking compulsory collection of the imposed fine and accrued interest from any member of the group. The development is expected to make a threat of fines more imminent, thus fostering compliance. Reportedly, the Ministry of Justice expressed some major comments on the draft and the AMC is working to accommodate them so that the draft can be submitted to the Parliament.
Introduction of vertical block exemption regulation. The draft AMC regulation closely follows the main principles of the Regulation (EU) 330/2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted (Block Exemption Regulation). The draft exempts a number of vertical agreements from prior AMC clearance, except for hard-core restrictions that include:
restriction of the buyer's ability to determine its sale price (the supplier may impose a maximum sale price or recommend a sale price);
restriction of the territory into which (or of the customers to whom) the buyer may sell the supplied goods or services;
restriction of cross-supplies between distributors within a selective distribution system.
The exemption does not apply if:
the combined market share of the supplier or the buyer in the Ukrainian market in relation to the supplied product exceeds 30%; or
either of the parties to a vertical agreement is dominant in any of the Ukrainian markets concerned.
The draft regulation was published in November 2011 and is on the list of the authority's policy priorities.
Regulation of state aid. The draft Law on State Aid to Undertakings prepared by the AMC outlines the concept of state aid provided to undertakings and its forms, and defines its legitimacy limits. The draft law also sets out block exemptions, state aid control and refund procedures, defines the powers of the competent authority, the appeal procedure, and so on. The finalised draft is expected to be submitted to the Ukrainian Parliament in 2012.
Description. Website is maintained by the AMC and contains official and up-to-date information. Available in Ukrainian only.
Description. The Law of Ukraine on Protection of Economic Competition of 2001, as well as the Law on the Antimonopoly Committee of Ukraine of 1993 are available in English. Not up-to-date.
Chairman. Vasyl Petrovych Tsushko (Chairman)
Outline structure. The AMC is the principal state authority entrusted with ensuring protection of competition in entrepreneurial activities and state procurement. It comprises the Chairman and either State Commissioners. The AMC has territorial divisions and administrative boards. The central office of the AMC has a number of departments, sections and industry-specific working groups (for example, concentrations and concerted practices, unfair competition, state procurement).
Responsibilities. The AMC's responsibilities include:
Review and analysis of the applications for approval of concentrations and concerted practices.
Investigation of violations of the Ukrainian competition laws, including unfair competition and abuse of dominance cases.
Market research, working out approaches to market definition (for example, by product, geographical scope).
General supervision of compliance with Ukrainian competition laws by undertakings and state and local authorities.
Procedure for obtaining documents. The following are published on the authority's website:
Main competition laws and regulations.
Draft laws and AMC regulations.
Various other AMC documents (for example, annual reports on the AMC's activities).
Short announcements of the AMC decisions.
Qualified. Ukraine, 1999
Areas of practice. Competition and anti-trust; corporate; M&A.
Acted for Allianz AG, Barclays, Swedbank AB, UC RUSAL, Arcelor, Glencore International AG, UniCredito Italiano S.p.A., Coca-Cola, Nokia Corporation, Sony Pictures Entertainment Inc., Electrolux, Siemens, Rosneft, Acer Europe B.V., Kodak Health Group, Ford, MAN AG, Caterpillar, Deer & Co, LVMH Moet Hennessy Louis Vuitton SA, YSL, Mitsubishi Chemical, Chrysler, Fiat, Eni, Onexim, Compagnie Gervais Danone in merger filings with the Antimonopoly Committee of Ukraine.
Advised Phillip Morris, Walt Disney Company, Coca-Cola, L'Oreal Ukraine, Daikin Europe, Siemens, and Chevron on competition compliance issues.
Counselled Beiersdorf AG, Nissan Motor, Heel, and Ansell on unfair competition matters.
Languages. English, Ukrainian, Russian
Professional associations/memberships. Deputy Chairman of the Public Council with the AMC; Chairman of the Competition Committee of the Ukrainian Bar Association; Co-Chair of the Competition Commission of the Ukrainian Committee of ICC Ukraine; Supporting Competition in the CIS Partnership; ICC Commission on Competition (Paris); International Bar Association; American Bar Association.
Competition: Ukraine, Practical Law multi-jurisdictional guide, 2012.
Ukraine Merger Control, European Lawyer Reference Series, 2012.
Vertical Agreements: Ukraine, Getting the Deal Through, 2012
Professional qualifications. Ukraine, 1996
Over 16 years of experience at the AMC and occupied various positions within AMC Legal and Legal Enforcement departments, including AMC Chief Legal's office. Served as AMC Commissioner from 2005 to 2012.
Advised ACNielsen Ukraine, Bunge Ukraine, Kronospan UA, L'Oreal Ukraine, Philip Morris Ukraine, Siemens and others on various competition compliance matters.
Acted for various companies in connection with AMC investigations and inspections.
Areas of practice. Competition and anti-trust; public procurement.
Languages. English, Ukrainian, Russian
Professional associations/memberships. Ukraine Bar Association.
The European Antitrust Review: Ukraine Chapter, Global Competition Review, 2013.
Comment to the Law On Protection of Economic Competition on the basis of comparative analysis of Ukrainian and EU competition law. Section VI–IX Procedural aspects of the investigation and a decision by the AMC, European Commission, 2006.