Restraints on Trade Global Guide

Scope of rules

1. Are restrictive agreements and practices regulated? If so, what are the substantive provisions and regulatory authority?

Regulatory framework

Restrictive agreements and practices may qualify as anti-competitive concerted practices (that is, practices that resulted or may result in the prevention, elimination or restriction of competition). There is a general prohibition of anti-competitive concerted practices, unless an exemption applies (see Question 3).

Anti-competitive concerted practices are subject to administrative sanctions under the Law of Ukraine on Protection of Economic Competition 2001 (Competition Law). In addition, third parties that sustained damage as a result of such violations may claim damages (see Question 14). There is no criminal liability for these violations.

In addition to the Competition Law, the regulatory framework includes the:

• Law on the Antimonopoly Committee of Ukraine (AMC) 1993 (Law on the AMC).
• AMC Methodology for Establishment of the Monopoly (Dominant) Position of the Undertakings on the Market 2002 (Monopoly Methodology).
• AMC Resolution on the Procedure for Filing Applications with the AMC for Obtaining its Approval of the Concerted Practices of the Undertakings 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 2002 (General Exemption Regulation).
• AMC Resolution on the Standard Requirements to Associations 2006.
• AMC Resolution on the Standard Requirements to Concerted Practices of the Undertakings concerning Specialisation of Production 2008 (Specialisation Regulation).
• AMC Resolution on the Standard Requirements to Concerted Practices of the Undertakings concerning Joint R&D and/or Development and Engineering Works 2012 (R&D Regulation).
• Regulation on the Procedure Application of Leniency 2012 (Leniency Regulation).
• Guidelines on Calculation of Fines for Violation of Ukrainian Competition Law 2016 (Guidelines on Fines).
• AMC Resolution on the Standard Requirements to Vertical Concerted Practices of the Undertakings 2017 (Vertical Block Exemption Regulation).
• AMC Resolution on the Standard Requirements to Concerted Practices of the Undertakings concerning Technology Transfer Agreements 2018.
• AMC Standard Requirements to Concerted Practices of Small and Medium-Sized Businesses on Joint Purchasing 2019.

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 most commonly include, among others:

• Fixing prices or other purchase or sale conditions.
• Limiting production, markets, technological development or investment, as well as assuming control of them.
• 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 (similar actions or omissions) that 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.

(Article 6, Competition Law.)

Regulatory authority

The AMC is the primary authority entrusted with ensuring protection of competition. In particular, it has powers to investigate, as well as grant or refuse granting the authorisation for concerted practices. If the AMC refuses to approve the concerted practices, the Cabinet of Ministers of Ukraine may overrule that decision (see Question 3, Individual exemption and Question 5, Relevant authority).

2. Do the regulations only apply to formal agreements or can they apply to informal practices?

The regulations apply to agreements and other concerted practices irrespective of their form. The following are covered:

• Formal written agreements.
• Informal verbal arrangements.
• Gentlemen's agreements.
• Mutual understandings.
• Other concerted practices, including, in certain circumstances, parallel behaviour (see Question 1).

Any agreements involving anti-competitive concerted practices are presumed to violate the law (for example, price-fixing or market sharing arrangements).

Exemptions

3. Are there any exemptions? If so, what are the criteria for individual exemption and any applicable block exemptions?

Individual exemption

The AMC can authorise (grant an individual exemption to) certain potentially anti-competitive concerted practices if both:

• 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.

(Article 10, Competition Law.)

In exceptional circumstances, the Cabinet of Ministers can allow concerted practices (unless the restriction of competition poses a threat to the market economy system or parties impose disproportionate restrictions) 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.

Block exemptions

Vertical Block Exemption. The Vertical Block Exemption Regulation exempts vertical restraints (save for hardcore restrictions) where the market shares of each of the supplier and the buyer on the market where they respectively sell and buy the contract goods or services, do not exceed 30%.

The Vertical Block Exemption Regulation does not cover arrangements among competitors (except for non-reciprocal arrangements, under certain conditions). Also, it does not apply to long-term non-compete clauses and some other restrictions with similar effect.

The following provisions, in particular, are regarded as hardcore restrictions (subject to certain exceptions) and cannot be block exempted:

• Restrictions on resale prices.
• Restrictions by territory or by customers.
• Restriction of active or passive sales to end-users by members of a selective distribution system operating at the retail level of trade.
• Restrictions of cross-supplies within a selective distribution system.
• Restrictions of the supplier's ability to sell the components as spare parts to end-users or to repairers.

Technology Transfer Exemption. The Technology Transfer Exemption Regulation exempts technology transfer agreements if either:

• It is concluded between competitors and their combined market share does not exceed 20% of the relevant market(s).
• It is concluded between non-competitors and the market share of each of the parties does not exceed 30% of the relevant market(s).

A technology transfer agreement, as a whole, will not benefit from the exemption if it contains hardcore restrictions, in particular (and subject to certain exceptions):

• Restrictions on resale prices, limitation of output, allocation of markets or customers, restriction of the licensee's ability to exploit its own technology rights or the restriction of the ability of any of the parties to carry out research and development (in agreements between competitors).
• Restrictions on resale prices, restrictions of passive sales (that is, restriction of active or passive sales to end-users by a licensee which is a member of a selective distribution system and which operates at the retail level (in agreements between non-competitors)).

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 that 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 holds 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 or sell agreed products only jointly.
• Refraining from supplying or acquiring the agreed products to/from competing undertakings.
• Keeping minimum stock of the agreed products.

R&D exemption. The R&D Regulation exempts 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 of the parties on the relevant market does not exceed 25% and the parties meet a set of other criteria (for example, 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 (for example, participants receive no profit from the association's activities, limitation of co-ordination to organisational, educational, informational aspects, no interference with business activities of participants, no limitations on entry and exit and so on).

Joint Purchasing Exemption. The Joint Purchasing Exemption Regulation exempts joint purchasing arrangements among small and medium-sized enterprises if (save for certain exceptions):

• The combined market share of the purchasers and the sellers do not exceed 20%.
• The combined market share of the purchasers and the sellers do not exceed 35% if in the market where they purchase the contract products there is a seller with a market share exceeding 35%.

Exclusions and statutes of limitation

4. Are there any exclusions? Are there statutes of limitation associated with restrictive agreements and practices?

Exclusions

Generally, the prohibition of anti-competitive concerted practices does not apply to:

• Agreements concerning the transfer of intellectual property rights (IPRs), if these 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; or
  • type of activity, application, and minimal production volume.

(See Question 3, Technology Transfer Exemption.)

• Concerted practices of small or medium-sized undertakings concerning the joint purchasing of products (see Question 3, Joint Purchasing Exemption). Concerted practices in relation to the supply and use of products that limit the:
  • 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.

(Article 8, Competition Law)

However, this exception does not apply if the above restrictions on the supply and use of products:

• Result in a substantial restriction of competition on the market.
• Limit other undertakings' access to the market.
• Result in economically unjustified price increases or product shortages.

(See Question 3, Vertical Block Exemption.)

General Exemption Regulation provides for a market share-based exemption, which is applicable to 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%. However, the market share-based exemption cannot apply if either party holds a dominant position of the relevant market.

If the parties are at least potential competitors, the general exemption does not apply to horizontal or mixed hard-core restrictions, including:

• Price-fixing.
• Territorial, customer or supplier and other market sharing.
• Restrictions on (including imposing an obligation to refrain from) the production or distribution of products.
• Distortion of the results of trading, auctions, competitions or tenders.

Statutes of limitation

The statute of limitation in relation to restrictive agreements and practices is five years from the moment when the infringement ceases (assuming that restrictive agreements and practices are continuing infringements). The statute of limitation is suspended for the duration of the AMC's investigation of the alleged infringement.

Notification

5. What are the notification requirements for restrictive agreements and practices?

Notification

Implementation of an anti-competitive concerted practice that is not covered by a block exemption or other exclusion is prohibited, unless the transaction is individually cleared by the AMC before implementation.

Informal guidance/opinion

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.

Responsibility for notification

The parties are jointly responsible for notifying.

Relevant authority

The AMC is the relevant authority. However, the Cabinet of Ministers may approve a concerted practice even if the AMC has refused clearance (see Question 3, Individual exemption).

Form of notification

The parties to a concerted practice must submit a written notification with the contents and annexes as set out in the Concerted Practices Regulation. There is no prescribed form of notification. Some information must also be submitted in electronic form.

Filing fee

The filing fee is UAH10,200 (approximately EUR380).

Investigations

6. Who can start an investigation into a restrictive agreement or practice?

Regulators

The AMC may launch an investigation on its own initiative (based on the available information, market monitoring or research and so on) or at the request of governmental or local authorities.

Third parties

Third parties can file a complaint with the AMC if they believe that certain arrangements or practices on the market may be anti-competitive and negatively impact their rights and interests. In particular, the following third parties can file a complaint:

• Competitors.
• Customers.
• Suppliers.
• Other legal entities or individuals that can substantiate/prove direct negative impact.

If not rejected on formal grounds, the complaint will be reviewed by the AMC within 30 calendar days (extendable by 60 calendar days if additional information is required). Following the review of a complaint, the AMC can start an investigation based on the third party complaint (formal complainant) or on its own initiative if the third party complainant (informal complainant) requests confidentiality due to possible negative consequences for it.

7. What rights (if any) does a complainant or other third party have to make representations, access documents or be heard during the course of an investigation?

Representations

A complainant and third parties can be involved in an investigation as third parties if their rights and interests may be significantly affected by the AMC's decision. The decision regarding their involvement is at the discretion of the AMC. The law does not distinguish between different classes of third parties (formal or informal complainant, other third party) with respect to the rights they have.

Third parties can submit their written and oral observations and provide evidence.

Document access

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.

Be heard

Third parties can submit their observations relating to, among other things, the restrictive agreement or practice and its impact on the market. The AMC must take these observations into account when deciding on the case.

8. What are the stages of the investigation and timetable?

There are no clear legislative guidelines for an 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 conducted, and the AMC can repeatedly request documents and information, and reconsider the evidence collected.

The entire investigation can be usually divided into three main stages:

• Collection of evidence, its analysis and preparation by the AMC of the preliminary submission (statement of objections) 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:
  • oral hearings and adoption of the final decision; or
  • 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 infringement was not proven.
• Internal appeal of the decision with the AMC.

During the investigation the AMC can issue recommendations aimed at the prevention or rectification of the alleged infringement and close the case without finding the parties in violation of the law.

In practice, the AMC investigations usually last more than six months, but may last up to several years.

Publicity and confidentiality

9. How much information is made publicly available concerning investigations into potentially restrictive agreements or practices? Is any information made automatically confidential and is confidentiality available on request?

Publicity

Information concerning investigations (except for the parties' confidential information (see below, Confidentiality on request)) can be made public, although the AMC is not statutorily required to do so. The disclosure can be made at any stage of the investigation, including before the proceeding is formally opened.

The law provides for the publication of non-confidential versions of the AMC's decisions and resolutions on:

• Merger and concerted practice applications and cases.
• Violation of competition cases.
• Initiation of merger Phase II reviews, within ten working days of the decision/resolution.

Automatic confidentiality

Automatic confidentiality does not apply to any information.

Confidentiality on request

Confidentiality may be available to the parties of an investigation on request (unless the AMC questions the confidentiality of information). When submitting confidential information to the AMC, the law requires the parties to provide a substantiation for the relevant confidentiality claim, as well as a non-confidential version of the information.

10. What are the powers (if any) that the relevant regulator has to investigate potentially restrictive agreements or practices?

When investigating potentially restrictive agreements or practices, the AMC can:

• Request information, explanations, 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).
• Conduct dawn raids.

Settlements

11. Can the parties reach settlements with regulators to bring an early resolution to an investigation? If so, what are the circumstances for doing so and the applicable procedure?

Ukrainian competition laws do not provide for an official procedure to reach settlements in an investigation. However, under the Guidelines on Fines, the 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).

In addition, the Ukrainian Parliament is considering a draft law setting out the settlement procedure.

12. Can the regulator accept remedies (commitments) from the parties to address competition concerns without reaching an infringement decision? If so, what are the circumstances for doing so and the applicable procedure?

During the investigation, the AMC can issue recommendations on the prevention or rectification of the alleged infringement identifying remedies and close the case without finding the parties to be in violation of the law. Remedies and the relevant procedures are not comprehensively regulated by Ukrainian laws and are usually negotiated with the AMC on a case-by-case basis.

Penalties and enforcement

13. What are the regulator's enforcement powers in relation to a prohibited restrictive agreement or practice?

Orders

For prohibited restrictive (anti-competitive) agreements or practices, the AMC can, in particular:

• Issue an individual clearance decision on the parties' application for approval of the agreement or practice. The decision can be conditional or unconditional, and limited or unlimited in time.
• Prohibit a notified or investigated agreement or 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 or practice impose on certain undertakings restrictions that generally are not imposed on other undertakings, or apply unequal terms.

Fines

Once the violation is established, the parties to a prohibited agreement or practice can be fined up to the higher of:

• 10% of their worldwide turnover on a group level in the year immediately preceding the year when the fine is imposed.
• Triple the amount of profit arising from the prohibited agreement or practice.

The Guidelines on Fines set the following basic fines for concerted practices:

• 15% of the turnover of the undertaking from the sales of products on the relevant (and adjacent) markets from the commencement of the violation until its termination or the AMC fining decision, for horizontal anti-competitive concerted practices such as fixing prices, dividing markets according to production, sale or purchase volumes.
• 5% of the turnover of the undertaking from the sales of products on the relevant (and adjacent) markets from the commencement of the violation until its termination or, if not terminated, for the last financial year, for implementation of concerted practices before individual exemption is granted by the AMC or the Cabinet of Ministers (see Question 3, Individual exemption and Question 5, Relevant authority).
• 10% of the turnover of the undertaking from the sales of products on the relevant (and adjacent) markets from the commencement of the violation until its termination or the AMC fining decision, for other anti-competitive concerted practices.

When defining the basic fine, the AMC can apply coefficients depending on the effect of the violation on competition, the social importance of the products and the profitability of economic activity connected with the violation, which may lead to an increase or a decrease of the fine (from 5% to 200%). Additionally, the above basic amounts are subject to possible further adjustment for aggravating and/or mitigating circumstances.

The statutory ceiling of fine of up to 10% of the worldwide turnover in the year preceding the fining decision (or up to triple the amount of illegal profit) remains in force. Although the Guidelines on Fines have a recommendatory nature and are non-binding, the AMC is publicly committed to follow its rules on setting fines strictly.

In addition to the financial penalties, the parties may face any or all of the following:

• Third party damages claims (see Question 14).
• Invalidation of the transaction (see below, Impact on agreements).
• Reputational issues (information about the imposed fine is published by the AMC on its website) (see Question 9).

Personal liability

There is no personal criminal or administrative liability, except that a state official may incur a nominal administrative fine if he or she fails to provide information to the AMC as required by law. The law also envisages personal administrative liability of companies' officers interfering with AMC's investigations. However, an efficient mechanism for implementation of this has not been created to date.

Immunity/leniency

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 before the AMC issues a statement of objection in the relevant investigation case (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 relating to leniency applicants, types of information and evidence an undertaking should provide for its application to be successful, filing mechanisms and review procedure, among others.

The current Leniency Programme does not work effectively (to date, reportedly, there have been only 10 leniency requests and no fine immunity granted). The Ukrainian parliament is considering the draft law revising and adding further detail to the leniency model to implement, in particular, the partial immunity for the second and subsequent whistle-blowers.

Impact on agreements

Anti-competitive agreements are not void per se, rather they can be invalidated by the court on the AMC's initiative. The AMC may also issue an order requesting the parties to discontinue a violation, which will effectively prohibit the parties from implementing an anti-competitive agreement.

Third party damages claims and appeals

14. Can third parties claim damages for losses suffered as a result of a prohibited restrictive agreement or practice? If so, what special procedures or rules (if any) apply? Are collective/class actions possible?

Third party damages

The parties to a restrictive agreement or practice may be exposed to damages claims by third parties. The amount of compensation is twice the amount of the actual damage sustained.

Special procedures/rules

Third parties that sustained damages as a result of an anti-competitive practice can seek to recover the damages suffered in court (legal entities in the commercial courts and individuals in the civil courts). The statute of limitation period is three years after a third party became aware of the damages. Ukrainian laws do not generally link the possibility to bring a claim with the AMC infringement decision. The AMC has exclusive powers to investigate the restrictive agreements or practices and determine whether a particular arrangement has any negative impact on competition in Ukraine (that is, anti-competitive). In practice, the prior infringement decision of the AMC is very helpful for judicial review.

Collective/class actions

Class actions are theoretically available. However, the procedural framework is underdeveloped, which makes class actions inefficient.

15. Is there a right of appeal against any decision of the regulator? If so, which decisions, to which body and within which time limits? Are rights of appeal available to third parties, or only to the parties to the agreement or practice?

Rights of appeal

Any AMC's decision can be appealed by the parties or third parties within two months following the receipt of the decision.

Procedure

Decisions of the AMC can be appealed to the commercial courts. The applicable Ukrainian procedural code regulating commercial court proceedings establishes a 30-day term for consideration of cases in the first instance (in addition to up to 60 days for opening the review proceeding), a 60-day term for the consideration of cases in the appeal instance, and a 30 to 60-day term for review on cassation. From a practical perspective, these terms are rarely met due to factors such as the:

• Courts' heavy workload.
• Necessity of conducting additional investigations.
• Collection of documents and information.

Therefore, the review on appeal can last for up to several years. Expedited review is not available.

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 party rights of appeal

Third parties can appeal an AMC decision (see above, Rights of appeal and procedure).

Monopolies and abuses of market power

Scope of rules

16. Are monopolies and abuses of market power regulated under administrative and/or criminal law? If so, what are the substantive provisions and regulatory authority?

Regulatory framework

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.

Regulatory authority

The AMC is the state authority primarily responsible for the prevention and investigation of the violations involving companies holding a dominant position.

17. How is dominance/market power determined?

An undertaking holds a dominant position on the market if it either:

• 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.

(Article 12, Competition Law.)

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.

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. See Question 29 for proposed changes.

18. Are there any broad categories of behaviour that may constitute abusive conduct?

The following practices are regarded as abuses of a dominant market position:

• Setting prices or conditions that 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.

Exemptions and exclusions

19. Are there any exemptions or exclusions?

There are no exclusions or exemptions.

Notification

20. Is it necessary (or, if not necessary, possible/advisable) to notify the conduct to obtain clearance or (formal or informal) guidance from the regulator? If so, what is the applicable procedure?

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.

Investigations

21. What (if any) procedural differences are there between investigations into monopolies and abuses of market power and investigations into restrictive agreements and practices?

There is no appreciable difference and the procedure is the same as for restrictive agreements and practices (see Question 6 to 9 and Question 11 and Question 12).

22. What are the regulator's powers of investigation?

The regulator's powers of investigation are the same as for restrictive agreements and practices (see Question 10).

Penalties and enforcement

23. What are the penalties for abuse of market power and what orders can the regulator make?

The statutory maximum fine for abuse of market power is the higher of:

• 10% of the undertaking's worldwide turnover on a group level in the year immediately preceding the year when the fine is imposed.
• Triple the amount of profit arising from the prohibited practice.

According to the AMC Guidelines on Fines, the basic fine for abuse of market power is 10% of the undertaking's turnover from the sales of products on the relevant (and adjacent) markets for the period from the commencement of the violation until its termination or the AMC fining decision.

When defining the basic fine, the AMC can apply coefficients depending on the effect of the violation on competition, the social importance of the products, and the profitability of economic activity connected with the violation, which may lead to an increase or decrease of the fine (from 5% to 200%). The above basic amounts are subject to possible further adjustment for aggravating and/or mitigating circumstances.

Although the Guidelines on Fines have a recommendatory nature and are non-binding, the AMC is publicly committed to follow its rules on setting fines strictly.

In relation to other penalties, see Question 13, 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.

Third party damages claims

24. Can third parties claim damages for losses suffered as a result of abuse of market power? If so, what special procedures or rules (if any) apply? Are collective/class actions possible?

This is the same as in relation to prohibited restrictive agreements or practices (see Question 14).

Collective/class actions

Class actions are theoretically available. However, the procedural framework is underdeveloped, which makes class actions inefficient.

EU law

25. Are there any differences between the powers of the national regulatory authority(ies) and courts in relation to cases dealt with under Article 101 and/or Article 102 of the TFEU, and those dealt with only under national law?

Not applicable.

Joint ventures

26. How are joint ventures analysed under competition law?

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 (and may require merger clearance) 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 its parents or the joint venture, on the one hand, and its parents, on the other.

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 its parents or the joint venture, on one hand, and its parents, on the other. Establishment of such joint venture is prohibited per se if it results or may result in the prevention, elimination or restriction of competition, though the parties may apply for the AMC's authorisation (see Question 3, Individual exemption).

Inter-agency co-operation

27. Does the regulatory authority in your jurisdiction co-operate with regulatory authorities in other jurisdictions in relation to infringements of competition law? If so, what is the legal basis for and extent of co-operation (in particular, in relation to the exchange of information)?

The AMC may cooperate with the regulatory authorities of other jurisdictions, including by transferring information to foreign competition authorities under a relevant international treaty. Confidential information can only be provided to a foreign competition authority if that authority:

• Will use the information exclusively for carrying out its duty.
• Can ensure that the information will not be disclosed for other purposes.

The law does not expressly provide for co-operation in relation to remedies or settlements.

Recent cases

28. What are the recent developments, trends or notable recent cases concerning abuse of market power?

Notable recent cases concerning abuse of market power in Ukraine include:

• PJSC Gazprom. The biggest fine on a single undertaking for abuse of dominance was imposed in January 2016 on PJSC Gazprom for UAH85.97 billion (approximately EUR3.26 billion), being the only undertaking entitled to buy services of natural gas transit pipelines through Ukraine. The undertaking's failure to take measures to ensure the services of natural gas transit pipelines through Ukraine on reasonable conditions (which would have been impossible under the conditions of existence of significant competition in the market) led to the infringement of the interests of "Naftogaz Ukraine".
• TEDIS. In December 2016, the AMC imposed a fine of UAH431 million (approximately EUR15.7 million) on the major tobacco distributor TEDIS (formerly Megapolis) for abuse of dominance through:
  • setting a maximum price mark-up that can be applied by its customers;
  • discrimination of wholesale customers by charging nearly identical prices to wholesale and retail customers;
  • discrimination of retail customers by charging wholesale prices to its retail customers at nearly the same level as the prices used in its own retail outlets; and
  • partially refusing to sell goods in the absence of alternative sources of supply, therefore reducing the competitiveness of third party wholesalers and retailers.
• Ostchem. In September 2019, the AMC imposed a fine of UAH107 million (approximately EUR3.8 million) for abuse of dominance and ordered the divestment of the fertilizer business of the Ostchem Group. This is the first time since 1995 that the AMC applied divesture remedies for the dominance abuse. The AMC established that three of the largest Ukrainian manufacturers of nitrogen fertilizers (Azot, Rivneazot, and Severodonetsk Azot) and the wholesale trading company "NF Trading Ukraine" (comprising the Ostchem Group) abused their dominant position of the market of initial sales of nitrogen fertilizers in 2014 to 2017 by:
  • manipulating natural gas (the key raw material for production of nitrogen fertilizers) prices within intragroup resales in 2014 to 2015 that could result in artificially high prices of fertilizers due to overcharged production costs; and
  • stopping the production of nitrogen fertilizers in March to June 2017, which resulted in an almost complete halt of supplies of nitrogen fertilizers to customers.

Proposals for reform

29. Are there any proposals for reform concerning restrictive agreements and market dominance?

The main proposals for reform concerning restrictive agreements and market dominance concern the following:

• Calculation of fines. The reform aims to:
  • make the Guidelines on Fines binding on the AMC;
  • empower the courts to annul the AMC's decisions as regards fines and/or obligations imposed on the parties; and
  • order the AMC to reconsider cases in this regard.
• Improving AMC proceedings. The proposed changes to the Competition Law include:
  • setting the terms for investigation by the AMC of cases concerning the violation of competition laws;
  • determining the scope of rights and obligations of parties that take part in the investigation of such cases;
  • the improved leniency model with the partial immunity;
  • introduction of a settlement procedure;
  • cancelling the penalty in the amount of 1.5% fine per each day of delay in payment (alternatively, cancelling the penalty for the period between the decision and the court's commencement of the review proceeding).
• Market Definition and Market Power Regulations. In March 2019, the AMC presented draft regulations on the market definition and on the determination of market power (dominance) aimed to approximate the approach to the EU‘s approach.
• Seizure of Evidences. In February 2019, the AMC presented new draft regulations on the seizure of evidence within the investigation conducted by the AMC to improve efficiency of the exercise.
• Leniency. For several years the Ukrainian parliament has been considering a draft law revising and adding further detail to the leniency model to implement, in particular, partial immunity for the second and subsequent whistle-blowers. However, the new parliament has declared that an even bigger leniency reform is coming. No text of the proposed reform is available yet.
• Commitments Decisions. The AMC is planning to draft amendments to the Competition Law regarding decisions on commitments to clarify the scope and procedure. No text of the proposed amendments are available yet.