Модернізація в Європі 2008, Україна

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Published in "Getting the Deal Through"

1. Which national laws and measures provide for enforcement of articles 81 and 82 of the EC Treaty?

The CA envisages three kinds of concerted actions, namely:

• anti-competitive concerted actions prohibited in Ukraine (in particular, all agreements between undertakings, as well as decisions by associations of undertakings and other concerted actions affecting prevention, restriction or distortion of competition on the market (these provisions are similar to article 81(1));
• concerted actions permitted in Ukraine, ie:
• concerted actions of small and medium entrepreneurs;
• where one participant of concerted actions establishes limits for another participant thereof (the list of the mentioned concerted actions is provided for by the CA); and
• concerted actions based on agreements on transfer and use of intellectual property rights; and
• concerted actions subject to prior permit of the relevant state authorities (these provisions are similar to article 81(3).
   

Implementation of article 82

2. What additional national competition rules exist?

In addition to the CA, the following laws regulate competition rules in Ukraine:

• the Act On the Anti-Monopoly Committee of Ukraine (the AMC Act);
• the Act On Protection against Unfair Competition; and
• the Act On Natural Monopolies.

Furthermore, effective Ukrainian legislation consists of many by laws governing particular spheres of competition eg, concerted actions; monopolistic (dominant) position in the market; concentration of undertakings; decision making and enforcement proceedings, etc.

3. Which national authorities are responsible for enforcing articles 81 and 82?

The Anti-Monopoly Committee of Ukraine (the AMC) is the authority responsible for enforcing articles 81 and 82 in Ukraine. The AMC consists of the chairman and 10 state authorised persons. The chairman is appointed for seven years and dismissed by the president of Ukraine by consent of the parliament.

As far as bodies of the AMC are concerned, they include the committee, administrative panels of the AMC (both standing and temporary); state authorised persons of the AMC and administrative panels of territorial branches of the AMC. Powers of the latter are divided pursuant to the CA, the AMC Act and regulations of the AMC.

4 Which courts hear cases and appeals concerning articles 81 and 82?

5. Does national law include rules on abuse of market power that are stricter than article 82?

• refusing to acquire or sell goods in part or in full in case there are no alternative sources of sale or acquisition;
• restricting considerably competitiveness of other undertakings on the market without justified reasons; and
• establishing obstacles to access for sellers, purchasers, and other undertakings to the market (or for their exit from the market) or removing them from the market.

Moreover, the CA provides for prohibition for undertakings possessing superior market power (not necessarily monopolistic) to abuse the latter (ie, establishing obstacles to business activity for small or medium-sized competitors).

National authorities - complaints and enforcement based on articles 81 and 82

6. What are the principal ways in which national powers of investigation and enforcement, and penalties for procedural non-compliance, differ from those of the European Commission?

The competence of the AMC differs from the competence of the European Commission in so far as the AMC has, in contrast to the Commission, the following powers to:

• authorise conduct of expert examinations;
• exempt evidence both written (including originals of documents) and material;
• seize objects, documents, other carriers of information;
• issue recommendations to bring to an end infringement of articles 81 and 82;
• make inspections concerning observance of legislation on protection of economic competition both scheduled and unscheduled;
• conduct hearings.

Unlike the European Commission, the AMC is not entitled to inspect private premises and means of transport.

Under the CA the AMC may impose fines on undertakings in an amount not exceeding 1 per cent of sales proceeds in the preceding business year in case of:

• failure by the undertakings to submit information within the required time limit;
• filing of incomplete information;
• providing misleading information; or
• hindering of the AMC inspections, seizure of objects, documents or other carriers of information.

Moreover, the Code of Ukraine on Administrative Offences (CUAO) stipulates liability in the form of fines (ie, from seven to 20 times a tax-free citizen's minimum income (TFCMI) - between 16 and 46 approximately) for:

• non-submission of information;
• submission of misleading information; or
• non-submission of information within the required time limit to the AMC

7. May a third party challenge a decision by the authorities to close the file on a complaint?

8. In what other circumstances may the authorities reopen a file?

The AMC may, upon request of persons or on its own initiative, reopen the proceedings in order to review its decisions subject to the following conditions:

• while hearing the case, the AMC was not aware of essential circumstances that led to adoption of an unduly or unjustified decision;
• the decision was adopted on the basis of incorrect or misleading information;
• participants of concerted actions or concentration failed to comply with requirements and commitments, based on which the AMC has passed a decision to issue a permit for concerted actions or concentration;
• circumstances, based on which the AMC has passed a decision to issue a permit for concerted actions or concentration, do not exist anymore; or
• other grounds envisaged by Ukrainian legislation.

The CA provides for exact terms within which the AMC is entitled to reopen proceedings.

9. To what extent can a complainant remain anonymous to the undertaking being complained about?

10. Can the authorities start an investigation on their own initiative?

11. What is the procedure for making a complaint and how is the complaint dealt with?

The CA provides for two types of proceedings, namely:

• issuance of permits for concerted actions or concentration of undertakings (permit issuance proceedings); and
• investigating infringements of legislation on protection of economic competition (infringement proceedings).

Permit issuance proceedings

(i) admission of the complaint - within 15 days of receipt of the complaint, the AMC is obliged to admit it (if there are no grounds to leave the complaint without consideration); (ii) examination of the complaint - the AMC shall examine the complaint within three months of admitting it;
(iii) consideration of the case on concerted actions or concentration - if the AMC, while examining the complaint, discovers grounds to forbid concerted actions or concentration or if there are justified grounds to conduct in-depth investigation of the complaint or to authorise conduct of expert examination, the AMC shall start hearing the case on concerted actions or concentration.
The period for the hearing of the case shall not exceed three months. At this stage the AMC is entitled to suspend the hearing of the case if it is impracticable to conduct it prior to adoption of a decision by the AMC or by a commercial court on another relevant case, or prior to adoption of a decision by state agencies related to the present case. In addition, the AMC shall suspend hearing the case for the whole time of conducting the expert examination;
(iv) adoption of the decision - having examined the complaint or having considered the case on concerted actions or concentration, the AMC shall adopt a final decision (ie, to issue a permit for concerted actions or concentration or to withhold issuance thereof); and
(v) issuance of permits for concerted actions or concentration -granted by the Cabinet of Ministers of Ukraine (the CMU).

• a complaint filed by an undertaking, individual or association;
• submissions made by a state or local authority; or
• on the initiative of the AMC (see above).

• after notifying the AMC about anti-competitive concerted actions, they failed to take efficient measures aimed at terminating them;
• they have initiated or managed the anti-competitive concerted actions; and
• they do not submit all evidence or information on infringement, notwithstanding the fact that they are aware of it and could obtain it without hindrance.

• whether the infringement influenced the market significantly;
• the advantages and profit gained by undertakings as a result of infringement;
• amount of losses caused by the infringement;
• duration of the prohibited practices;
• any repetition of the infringement; and
• financial status of the undertaking that committed the infringement.

• improving production or distribution of goods;
• promoting technical or economic progress;
• developing small and medium-sized entrepreneurs;
• optimising export or import of goods;
• working out and applying unified technical conditions or standards to goods; or
• rationalisation of production. The exemption is granted for a fixed period (the latter shall not exceed five years) or for an indefinite term. It is worth noting that the said exemption may be subject to fulfilment of conditions or obligations.

• a casual link between the infringement committed and the damages suffered. A defendant that has caused damages illegally shall prove that the latter were caused not from any fault of its own; otherwise, it is obliged to compensate the plaintiff. If an infringement finding has been made by the AMC, then, the plaintiff shall prove only occurrence of the damages suffered and of the casual link between the infringement and the damages.

• an infringement of competition legislation committed by a defendant;
• damages suffered by the plaintiff (occurrence and amount thereof);