New rules of antimonopoly regulation
Upon execution of the Association Agreement between Ukraine of the one part and the European Union, European Atomic Energy Community and their member-states of the other, Ukraine has undertaken a number of obligations, in particular in the area of competition, which resulted in development and adoption of progressive legislative acts. The next stage in the pending antimonopoly reform was adoption by the Ukrainian Parliament on February 7th, 2019 of the law amending the legislation on protection of economic competition (hereinafter – the Law). In general, the law purports to govern a number of procedural aspects. Such changes must ensure objective consideration of cases on violation of economic competition protection legislation, as well as introduce effective mechanism of protecting rights and interests of persons under investigation of the AMCU, thereby implementing European standards in Ukrainian legal realities.
A significant progressive point introduced by the Law is detailing grounds and procedure for releasing from liability for anticompetitive concerted actions. A perpetrator will be released from liability provided that he voluntarily informed the AMCU of the violation earlier than other participants by filing an application for release from liability. Furthermore, the Law prescribed reduced fines for participants of cartel collusions, for voluntary provision of evidence for this violation, and those who cannot be released from liability since another member of the cartel files an application for release from liability before, in particular, amount of fines for the violation will be reduced in order of providing evidence in this case, namely for 50%, 30% and 20% respectively from the fine calculated by the AMCU. It should be noted that this practice is quite widespread in the European countries.
Also the Law presents to the Ukrainian community the procedure for settling anticompetitive concerted actions cases. Persons under investigation of the AMCU can enter into agreement with the AMCU on cooperation in exchange for fine reduction. The settlement procedure is aimed, in particular, at reducing the term for considering cases and terminating violations, and thereby increasing effective protection of economic competition. Upon application of the settlement procedure the defendant can pay fine the amount of which is 20% less compared to the calculated amount of fine which was to be imposed in case the settlement procedure is not applied. In its turn, this change demonstrates the dispute settlement institution in cases considered by the European competition departments.
Term of case consideration by the AMCU is another important novelty element offered by the Law. Before that the issue of case consideration term was not regulated by law, which sometimes led to case consideration delays. The corresponding norm in the law prohibits the Committee from investigating a violation for more than 2 years. However, this rule has exceptions, in particular, the Law grants to the AMCU 5 years to investigate cases on anticompetitive concerted actions among competitors. Unfair competition cases must be considered by the AMCU within 1 year upon adopting a decree to start the case consideration.
Not less important changes introduced by the Law regarding persons taking part in the case should be noted as well. In particular, the Law defines third parties differently, in particular, it determines that a third party is a person who applied to the AMCU and confirmed that actions of another person violate its rights and interests. The Law grants to third party right of applicant in a case. Thus, consumers and other persons which are not subjects of application to the AMCU, however whose rights were violated, will be able to take part in case consideration as third parties.
This Law will become effective 3 months upon its publication, however the regulation procedure will be implemented on January 1st, 2020.
We hope that changes specified in this law will facilitate quality law enforcement and therefore increase in economic competition protection system effectiveness.
Contact the authors:
Andrii Gorbatenko, partner, head of Antimonopoly Law practice at Legal Alliance Company, gorbatenko@l-a.com.ua
Khrystyna Suchkevych, associate at Legal Alliance Company, sushkevych@l-a.com.ua
