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2023 | OriginalPaper | Chapter

The “Europeanization” of Competition Law in Ukraine

Author : Kseniia Smyrnova

Published in: Competition and Intellectual Property Law in Ukraine

Publisher: Springer Berlin Heidelberg

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Abstract

The EU–Ukraine Association Agreement (the EU–Ukraine AA) significantly affects the particular application of national competition rules. Due to including strict and specific provisions on competition rules within the EU–Ukraine AA, we can observe a tendency towards the “Europeanization” of competition law due to the transposition of commitments on the implementation of competition acquis into Ukrainian legal order. The competition chapter of the EU–Ukraine AA is lengthy and divided in two sections: anti-trust and mergers; and state aid. This chapter analyzes the main achievements of Ukrainian competition law from the perspective of the transposition of substantial norms (merger regulation, vertical restraints and exemptions) and the implementation of procedural principles. Particular attention is paid to the practice of the Anti-monopoly Committee of Ukraine (the AMCU), including the grounding of decisions and the adoption of specific by-laws. This chapter also analyzes current judicial practice of Ukrainian courts with strict reference to the provisions and commitments of the EU–Ukraine AA, and it examines the norms of the obligatory approximation of substantial norms, as well as the necessity of their enforcement to the system. Particular attention is also paid to state aid and the current enforcement practice of the AMCU, as well as judicial practice, including two current Ukrainian Supreme Court decisions in the field of state aid.

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previous chapter Legal Support of State Economic Policies of Ukraine in the Context of Investment Development and Protection of Competition

next chapter Vertical Agreements in the Competition Law of Ukraine and the EU: A Closer Look at Resale Price Maintenance

See Alison Jones and Christopher Townley, ‘Competition Law’ in Catherine Barnard and Steve Peers (eds), European Union Law (Oxford University Press 3rd ed. 2020) 149, 544.

See the United Nations Conference on Trade and Development, Voluntary Peer Review of Competition Law and Policy: Ukraine Overview’, UNCTAD/DITC/CLP/2013/3, 2013.

The Ukrainian Law on the Protection of Economic Competition 2001, 2210-III.

The Antimonopoly Committee of Ukraine, Order 399-r on the Establishing of the Order of Release from Responsibility 2012, No. 1553/21865.

The Ukrainian Law on the Ratification of the Protocol of Ukraine’s Accession to the World Trade Organisation 2008, 250-VI.

The Ukrainian Law on Ratification of the Agreement on free trade between Ukraine and Member States of EFTA 2011, 4091-VI.

The Association Agreement between the European Union and its Member States, on the one part, and Ukraine, on the other (2014) OJ L161/3 (EU–Ukraine Association Agreement), 3–2137.

European Commission, ‘Council Decision on the Union position within the Association Council stablished by the Association Agreement between the European Union, the European Atomic Energy Community and its Member States, of the one part and Ukraine, of the other part with regard to the adoption of a Recommendation on the implementation of the EU–Ukraine Association Agenda’ JOIN(2015) 4 final, 2015. For details on the AA, see also Roman Petrov, ‘The EU–Ukraine Association Agreement as a General Framework of Contemporary EU–Ukraine Relations’ in this Volume.

Chapter 1, art 9 Ukrainian Constitution of 1996 states that: “International treaties in force, consented by the Verkhovna Rada of Ukraine (Ukrainian Parliament) as binding, shall be an integral part of the national legislation of Ukraine. Conclusion of international treaties, contravening the Constitution of Ukraine, shall be possible only after introducing relevant amendments to the Constitution of Ukraine”.

See Ch. 2, art 19, the Ukrainian Law on International Agreements of Ukraine 2004.

For example, Viktor Muravyov, ‘Legal Approximation: Evidence from Ukraine’ in Marise Cremona and Gabriella Meloni (eds), The European Neighbourhood Policy: A Framework for Modernisation?—EUI Working Papers LAW 2007/21 (European University Institute Law Department 2007) 129–136; Cristophe Hillion, ‘A New Framework for the Relation Between the Union and its East-European Neighbours’ in Marise Cremona and Gabriella Meloni (eds), The European Neighbourhood Policy: A Framework for Modernisation?—EUI Working Papers LAW 2007/21 (European University Institute Law Department 2007) 147–154; Roman Petrov and Peter van Elsuwege, ‘Article 8 TEU: Towards a New Generation of Agreements with the Neighbouring Countries of the European Union?’ (2011) 36(5) European Law Review 688–703.

Kseniia Smyrnova, ‘The Implementation of the Competition Provisions in the Association Agreement Between Ukraine and the European Union’ (2015) 8 Law of Ukraine 75–82.

EU–Ukraine Association Agreement, art 254.

Ibid art 256.

Council Regulation (EC) 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EU Merger Regulation) (2004) OJ L24/1, 1–22.

The Ukrainian Law on Sanctions 2012, 1644-VII.

Igor Svechkar and Alexey Pustovit, ‘Merger Control 2021’ Chambers and Partners (7 July 2021) https://practiceguides.chambers.com/practice-guides/merger-control-2021/ukraine/trends-and-developments accessed 17 February 2022.

The Antimonopoly Committee of Ukraine, Guidelines on Providing Recommendations on the Procedure for Applying Part One of art 25 Law of Ukraine on Protection of Economic Competition (on the Assessment of Horizontal Concentrations) 2016, No. 49-rr, 226–16.

The Antimonopoly Committee of Ukraine, Guidelines on Providing Recommendation Clarifications on the Procedure for Applying Part One of art 25 Law of Ukraine On Protection of Economic Competition (on the Assessment of Non-horizontal Concentrations) 2018, No. 13-rr.

The Antimonopoly Committee of Ukraine, Guidelines on the Application of the Concept of Control, 1 November 2018 https://amcu.gov.ua/storage/app/sites/1/imported_content/5d69108d71592.pdf accessed 26 October 2022.

The Antimonopoly Committee of Ukraine, ‘Annual Report on Providing State Aid to Undertakings in Ukraine in 2020’ (Annual Report), 2020, 101.

Ibid 103.

Ibid 104.

Ibid.

The Antimonopoly Committee of Ukraine, Decision (2019) No. 284-r.

The previous highest fine was approximately 500,000 EUR, for the acquisition of control over a Ukrainian bank.

The Antimonopoly Committee of Ukraine, Decision (2019) No. 286-r.

The Ukrainian Draft Law on Amendments to Certain Legislative Acts of Ukraine on Improving the Activities of the Antimonopoly Committee of Ukraine 2021, 5431-1.

Anastasia Usova and Denys Medvediev, ‘New Merger Control Thresholds in Ukraine and Other News From the AMC’ Kluwer Competition Law Blog (27 October 2020) http://competitionlawblog.kluwercompetitionlaw.com/2020/10/27/new-merger-control-thresholds-in-ukraine-and-other-news-from-the-amc/ accessed 16 February 2022.

The Ukrainian Law on Protection of Economic Competition, art 10: “Concerted Actions which May be Authorized

(1)

The concerted actions, provided for by Article 6 of this law, may be authorized by the appropriate bodies of the Antimonopoly Committee of Ukraine, if their participants prove, that these actions promote:

the improvement production, procurement or sale of goods;

technical, technological and economic development;

the development of small and medium enterprises;

the optimization of export or import of goods;

the development and application of the uniform specifications or standards for goods;

the rationalization of production.

(2)

The concerted actions, provided for in paragraph one of this Article, may not be authorized by the bodies of the Antimonopoly Committee of Ukraine, if the competition is significantly restricted on the whole market or in its significant part.

(3)

The Cabinet of Ministers of Ukraine may authorize concerted actions, which have not been authorized by the Antimonopoly Committee of Ukraine pursuant to paragraph two of this Article, if participants of concerted actions prove that the positive effect for public interests prevails over adverse consequences of competition restriction.

(4)

The authorization provided for in paragraph three of this Article may not be given if:

participants of concerted actions apply restrictions which are not required for the implementation of the concerted actions;

the restriction of competition constitutes a threat to the system of market economy.

(5)

It shall be prohibited to take concerted actions, provided for in this Article, until authorization has been granted by bodies of the Antimonopoly Committee of Ukraine or the Cabinet of Ministers of Ukraine”.

The Regulation on the Procedure for Applying to the Antimonopoly Committee of Ukraine for Granting Permission for Concerted Actions of Undertakings (Regulation on Concerted Actions) 2002, No. 26-p, No. 11, 253.

The EU–Ukraine Association Agreement, art 256(1); Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ 2003 L 1/1 (Implementation of the Rules on Competition Directive), art 30.

AMCU, Search for official documents https://amcu.gov.ua/npasearch?&category=12 accessed 26 October 2022.

Implementation of the Rules on Competition Directive, (n 33) 1–25.

The Antimonopoly Committee of Ukraine, Guidelines on Recommendations for the Application of the Provisions on Ukrainian Law on the Protection of Economic Competition 2001, art 52(2)(5), and on Ukrainian Law on Protecting Against Unfair Competition 1996, art 21(1)(2) No. v1 6, 226–15, 15 September 2015, No. 16-rr.

Antimonopoly Committee of Ukraine on the Procedure for Exemption from Liability 2012, No. 399-r; Official Journal of Ukraine 2012, No. 73, 206.

For example, Poltava Regional Commercial Court, Decision (2016) 917/2711/15, does not take into account the clarifications of the Guidelines, noting that this document has not been registered with the Ministry of Justice and is of a recommendatory nature; In cases No. 13/200-06-7383 and No. 13/199-06-7382 the Ukrainian Commercial Court of Cassation of the Supreme Court stated that the legislation does not refer to the powers of commercial courts to decide on the reduction of the fine.

Ukrainian Commercial Court of Cassation of the Supreme Court, Decision (2021) 910/10017/19.

See Sergiy Glushcenko and Ivan Yaremchuk, ‘Ukrainian Supreme Court Annulled One of the Highest Fines for Gun-jumping’ Kluwer Competition Law Blog (19 March 2021) http://competitionlawblog.kluwercompetitionlaw.com/2021/03/19/ukranian-supreme-court-annulled-one-of-the-highest-fines-for-gun-jumping/ accessed 16 February 2022.

See footnote 28: The AMCU has published draft amendments to the law that, inter alia, allows addressing the fine to the parent based on the argument that the parent has decisive influence over the direct infringer. In such cases, the parent and subsidiaries (direct acquirers) will be jointly and severally liable for payment of the fine. This amendment seeks to bring the Ukrainian laws closer to the EU acquis.

Methodology for the establishment of the monopoly (dominant) market position of undertakings, approved by the Antimonopoly Committee of Ukraine, Order (2002) No. 49-p.

Such as Ukrainian Draft Law 2431, 2015, concerning the implementation of principles of imposing fines wasn’t supported by the Parliament.

Approved by the Antimonopoly Committee of Ukraine, Resolution (1994) No. 5, registered with the Ministry of Justice of Ukraine on 6 May 1994 after No. 90/299.

See also Kseniia Smyrnova and Natalia Fokina, ‘The ‘Europeanization’ of Competition Law of Ukraine’ (2022) 71(1) GRUR International 1 (1–2).

Kseniia Smyrnova and Erika Szyszczak, ‘Modern Approaches to State Aid: Ukraine’ (2020) 19(1) European State Aid Law Quarterly (8–18).

For example, Antimonopoly Committee of Ukraine Order (2015) No. 43-pr and Antimonopoly Committee of Ukraine Orders (2016) No. 2-pr and No. 8-pr.

For example, the Cabinet of Ministers of Ukraine on Criteria for Approval of State Aid for regional development and support of SMEs No. 57 of 7 February 2018; The Cabinet of Ministers of Ukraine on Criteria for Approval of State Aid to business entities for the employment of certain categories of employees No. 33 of 31 January 2018; The Cabinet of Ministers of Ukraine on Criteria for Approval of State Aid to economic entities for research, technical development and innovation No. 118 of 7 February 2018; the Cabinet of Ministers of Ukraine on Criteria for Approval of State Aid to economic entities in coal sector No. 38 of 13 January 2021, etc. General information about the legal basis see at State aid portal http://pdd.amc.gov.ua/portal/main/content/about accessed 26 October 2022.

Ukrainian Administrative Procedure, 640/65/19; Vinnytsia City Council, (2020) No. K/9901/30620/19; Kyiv City Council, 640/21523/19.

ECJ C-280/00 Altmark Trans GmbH and Regierungspräsidium Magdeburg v. Nahverkehrsgesellschaft Altmark GmbH, and Oberbundesanwalt beim Bundesverwaltungsgericht (2003) EU:C:2003:415.

Kyiv City Council 640/21523/19.

On this aspect, see also Oles Andriychuk, ‘Towards a New Digital Competition Policy of Ukraine: The EU Matrix’ in this Volume.

In this area, see the analysis on the current stage and perspectives of Ukrainian competition law of Anzhelika Gerasymenko and Nataliia Mazaraki, ‘The “New Normal” in Competition—Filling the Gaps of Ukrainian Competition Law in the Digital Economy Age’ in this Volume.

Antimonopoly Committee of Ukraine, ‘Annual Report on Providing State Aid to Undertakings in Ukraine in 2020’ (Annual Report), 2020

Antimonopoly Committee of Ukraine, Guidelines on the Application of the Concept of Control, 1 November 2018 https://amcu.gov.ua/storage/app/sites/1/imported_content/5d69108d71592.pdf [Антимонопольний Комітет України, Meтoдичнi Peкoмeндaцiї щoдo Зacтocyвaння Пoняття Кoнтpoлю, 1 листопад 2018]

Ondrej Blazo, ‘Harmonization of Competition Law in Globalized Economy and European Law’ (2010) Comenius University in Bratislava, Faculty of Law, Institute of International Relations and Comparative Law

Valerie Demedts, ‘Which Future for Competition in the Global Trade System: Competition Chapters in FTAs’ (2015) 49 (3) Journal of World Trade 407

Sergiy Glushcenko and Ivan Yaremchuk, ‘Ukrainian Supreme Court Annulled One of the Highest Fines for Gun-jumping’ Kluwer Competition Law Blog (19 March 2021) http://competitionlawblog.kluwercompetitionlaw.com/2021/03/19/ukranian-supreme-court-annulled-one-of-the-highest-fines-for-gun-jumping/

Cristophe Hillion, ‘A New Framework for the Relation Between the Union and its East-European Neighbours’ in Marise Cremona and Gabriella Meloni (eds), The European Neighbourhood Policy: A Framework for Modernisation?—EUI Working Papers LAW 2007/21 (European University Institute Law Department 2007) 147

Jitendra Jain, Harmonization of International Competition Laws: Pros and Cons (Anchor Academic Publishing 2012)

Alison Jones and Christopher Townley, ‘Competition Law’ in Catherine Barnard and Steve Peers (eds), European Union Law (Oxford University Press 3rd ed. 2020) 149

Viktor Muravyov, ‘Legal Approximation: Evidence from Ukraine’ in Marise Cremona and Gabriella Meloni (eds), The European Neighbourhood Policy: A Framework for Modernisation?—EUI Working Papers LAW 2007/21 (European University Institute Law Department 2007) 129

Kseniia Smyrnova and Natalia Fokina, ‘The “Europeanization” of Competition Law of Ukraine’ (2022) 71(1) GRUR International 1

Kseniia Smyrnova, ‘Europeanization of Competition Law: Principles and Values of Fair Competition in Free Market Economy in the EU and Association Agreements with Ukraine, Moldova and Georgia’ in Stefan Lorenzmeier, Roman Petrov, Christoph Vedder (eds), EU External Relations Law (Springer 2021)

Kseniia Smyrnova and Erika Szyszczak, ‘Modern Approaches to State Aid: Ukraine’ (2020) 19(1) European State Aid Law Quarterly

Kseniia Smyrnova and Iryna Berezovska, ‘Association Agreements as Means of Eastern Partnership Member States’ Europeization’ (2018) 4(20) Social and Human Sciences, Polish-Ukrainian Scientific Journal

Kseniia Smyrnova, ‘Competition Law Issues in EU–Ukraine, Moldova & Georgia Association Agreements (Comparative Aspects)’ in Alexander Trunk, Susanne Rieckhof and NazarPanych (eds), Legal Aspects of the EU Association Agreements with Georgia, Moldova and Ukraine in the Context of the EU Eastern Partnership Initiative (Josef Eul Verlag 2017)

Kseniia Smyrnova, ‘The Implementation of the Competition Provisions in the Association Agreement Between Ukraine and the European Union’ (2015) 8 Law of Ukraine [Ксенія Смирнова ‘Iмплeмeнтaцiя Пoлoжeнь пpo Кoнкypeнцiю в Угoдi пpo Acoцiaцiю мiж Укpaїнoю тa Євpoпeйcьким Coюзoм’ (2015) 8 Пpaвo Укpaїни]

Roman Petrov, Peter van Elsuwege, ‘Article 8 TEU: Towards a New Generation of Agreements with the Neighbouring Countries of the European Union?’ (2011) 36(5) European Law Review 688

‘United Nations Conference on Trade and Development, Voluntary Peer Review of Competition Law and Policy: Ukraine Overview’, UNCTAD/DITC/CLP/2013/3, 2013

Guillaume Van der Loo, The EU–Ukraine Association Agreement and Deep and Comprehensive Free Trade Area: A New Legal Instrument for EU Integration without Membership (Brill | Nijhof 2016)

Title: The “Europeanization” of Competition Law in Ukraine
Author: Kseniia Smyrnova
Publisher: Springer Berlin Heidelberg
Book: Competition and Intellectual Property Law in Ukraine
Print ISBN: 978-3-662-66100-0

Electronic ISBN: 978-3-662-66101-7

Copyright Year: 2023
DOI: https://doi.org/10.1007/978-3-662-66101-7_5