2.1 Overview

General practices and grounds for liability

According to Ukrainian regulations, concerted actions comprise the following:

• concluding an agreement of any form;
• approving a decision of any form by associations;
• establishing a joint venture ("JV") which aims at the coordination of the competitive activities of the JV or its founders;
• any other concerted actions of business entities.

Concerted actions which have resulted or may result in the banning, elimination or limitation of competition are forbidden. Any concerted actions may not be authorized if, as a result, competition is substantially restricted in the whole market or in a significant part thereof.

Are any industries specifically regulated?

There no specific regulations for specific industries.

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2.2. Dominance

A monopoly position is defined as a dominant position of a business entity that allows it, on its own, or together with other entities, to restrict competition in the market of a particular product. The position of an economic entity shall be considered as a monopoly (dominant) if its share in the relevant market exceeds 35%, unless the economic entity proves that it is exposed to substantial competition. Where the market share is less than 35%, the AMCU may still decide that the entity has a dominant position depending on the circumstances. Relevant regulations declare that the imposition of onerous contract terms, limiting or stopping production, refusing to buy or sell goods in an absence of alternatives, creation of barriers to entry, and discriminatory and monopoly pricing constitute an abuse of a monopoly position if they result in the restriction of competition.

The AMCU compiles a list of economic entities that have a monopoly position. The list facilitates permanent state control over the economic activities of monopolies. The AMCU may conduct planned inspections of monopolistic structures and examinations of their adherence to the antimonopoly legislation.

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2.3. Monopolistic agreements and concerted actions

Sanctionable actions

In particular, the following concerted actions of business entities are recognized as anticompetitive:

• fixing of prices or other conditions of acquisition or sale of goods;
• limitation of production, commodity markets, technical development, investments or establishment of control over them;
• distribution of markets or supply sources based on territorial principle, assortment of goods, volumes of sale or acquisition thereof, the circle of sellers, buyers or consumers, etc.;
• distortion of results of auctions, competitions, tenders;
• removal of other business entities from the market or restricting their access to (or exit from) the market;
• applying different terms to similar agreements with other business entities thus placing them at unacceptable competitive disadvantage;
• concluding agreements on the condition that other business entities undertake additional obligations which, by their nature or according to trade and other fair practices in entrepreneurial activity, have nothing to do with the subject of such agreements;
• substantial limitation of competitiveness of other business entities in the market without objective cause.

There is a procedure for seeking the authorization of anti-competitive concerted actions. The AMCU can allow such actions if their participants prove that the actions promote efficiency and the development of relevant markets.

Exemptions

Under vertical agreements (i.e. agreements of any form between a seller and a buyer, in a market, that do not compete with each other), a party to concerted actions may set limitations on:

• use of goods supplied by such party or other suppliers;
• acquisition of other commodities from other business entities or the sale of other commodities to other business entities or consumers;
• acquisition of goods, which by their nature or according to trade and other fair practices in entrepreneurial activity have nothing to do with the subject of the agreement;
• fixing of prices or other conditions of the agreement for sale of the supplied goods to other business entities or consumers.

However, the above rules are not applied where such concerted actions result in a substantial limitation of competition in the entire market or in a considerable part thereof, including monopolization of the relevant markets; the restriction of other business entities' access to the market; an economically unjustified price increase; or generate a shortage of goods.

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2.4. Unfair competition

Unfair competition is determined by Ukrainian law as any kind of action in competition that contradicts the rules of fair and honest business conduct.

The AMCU considers as unfair competition: dishonest actions of businessmen directed at withdrawal or restriction of competition on the market; unlawful use of another person's or entity's business reputation; creating of obstacles for competitors to gain illegal advantages in competition in the market; illegal gathering of business intelligence and improper use of commercial secrets. According to the AMCU's official website, the most widespread violations of fair competition are: illegal use of trademarks for commodities and services and other signs, company names, and discrediting the management of a competitor.

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2.5. Antitrust investigation

The AMCU may start an investigation into an alleged competition law breach based on:

• applications regarding violations submitted by business entities, physical persons, organizations, etc.
• requests by government bodies, local authorities, administrative and business management and control bodies; or
• at its own discretion.

The AMCU has competence to perform two different types of inspections: scheduled inspections (conducted on a yearly basis) and unscheduled ones. The inspection is performed by a commission appointed by the AMCU's chairman or office.

The AMCU has broad investigatory powers. AMCU commissions are entitled to freely enter the premises of businesses and organizations, have access to all documents and other materials, can demand oral and written statements from management, and request written and material evidence. It has the right to collect evidence from businesses as well as from government bodies and local governments. The extensive list of material evidence that the AMCU is entitled to demand includes corporate documents (articles of association and bylaws), accounting and financial statements, and commercial agreements; the information it may seize includes confidential and classified information. The law establishes strict rules for the data reporting procedure, for data the AMCU has requested, and provide the information requested by the AMCU is mandatory.

At the end of an inspection the AMCU issues, upon request, a certificate containing the analysis, conclusions and recommendations it has reached.

Decisions of the AMCU and its territorial divisions may be appealed at the commercial court.

AMCU decisions (i.e. excerpts thereof that do not contain classified information, information identifying an individual, and information the disclosure of which could harm the interests of the state, persons involved in the case, etc.) can be published on its official website (http://www.amc.gov.ua), printed or distributed electronically. go to top

2.6. Implications for infringers

Administrative sanctions

For breaches of competition law, infringers maybe punished with fines imposed by the AMCU of an amount of up to 5% of the entity's revenues from the sales of products, works, and services over the financial year preceding the year in which the fine was imposed. Persons who suffer damage as a result of unfair competition actions may file a court claim for compensation. The AMCU or the person whose rights were infringed may apply to the court for withdrawal of improperly labeled goods and copies of the products from the manufacturer/retailer. The AMCU may take a decision on the formal denial, by the offender, of untruthful, inaccurate or incomplete information.

For anticompetitive concerted action and abuse of a monopolistic (dominant) position, infringers maybe punished with fines imposed by the AMCU of an amount of up to 10% of the entity's revenues from the sales of products, works, and services over the financial year preceding the year in which the fine was imposed.

For refusing to submit information by the date requested, submitting incomplete information, submitting inaccurate information and obstructing the AMCU's officers during collection of evidence, the AMCU may impose fines of up to 1% of the relevant parties' turnover.

When a business entity abuses its monopolistic (dominant) position on the market, the AMCU has a right to file the relevant court claim to compel the compulsory split-up of the business entity which occupies that monopolistic (dominant) position.

Leniency

A person who has carried out an anticompetitive concerted action, but voluntarily informed the AMCU of the fact and submitted information of essential importance to taking a decision on the case before other participants in that action did so, is relieved from liability for committing an anticompetitive concerted action, except where he/she did not take efficient measures to terminate the action; or was the initiator of the anticompetitive concerted actions or managed them; or did not submit all such evidence or information that was known and that could be freely imparted, about the relevant violation committed by the person.

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