Antitrust enforcement in Ukraine during a year at war: 2022 highlights and 2023 prospects
Antitrust enforcement in Ukraine during the war in 2022 showcased the Antimonopoly Committee of Ukraine’s (the “AMC“) resilience, strength, and resolve. The AMC quickly resumed its operations after the initial months of the war and has been busy exercising its full range of enforcement powers. The agency’s excellent performance is highlighted in its recently published Annual Report for 2022 (the “Report“), which covers the most remarkable cases and critical trends in competition policy for Ukraine.
In summary, despite the war and challenging circumstances in Ukraine in 2022, the AMC remained active and effective, focusing on key sectors and trends, and imposing reasonable fines for violations.
In 2022, the AMC reviewed 530 merger filings, compared to 879 in the previous year. Of these filings, 379 were approved, down from 592 in 2021. Interestingly, the AMC returned 129 applications as incomplete in 2022, while in 2021, the number of returned notifications was 255.
The majority of mergers reviewed (93.7%) were cleared within Phase I review. The number of Phase II proceedings decreased somewhat compared to the previous year, with the AMC reviewing nine mergers within Phase II. Of these, six mergers were cleared under conditional approvals, while the other cases were closed without a decision in substance.
Mergers in forestry, land and real estate, agriculture, heavy industry, fuel and energy, and transportation were the AMC’s main focus in 2022.
Fines for failure to notify concentrations
The AMC investigated fewer cases on failure to notify reportable concentrations in 2022 than in 2021 (28 against 61). This decrease could be attributed to the fact that the AMC did not review cases where parties closed transactions before obtaining clearance in Ukraine during martial law. The overall amount of fines for failure to notify concentrations was also lower in 2022 (EUR 280,000 in total against EUR 5.1 million for 2021) due to the absence of large fines and significantly lower average fines for merger control violations. This indicates that the AMC considers the difficulties companies face when notifying deals in Ukraine.
One of the largest fines (approximately EUR 26,000) was imposed on a local acquirer for failure to notify reportable lease of assets amounting to going concern, i.e. the so-called ‘unified property complex.’
Ancillary restraints notified
In 2022, the AMC reviewed 46 concerted practices applications, and 32 of them were approved. The remaining nine were returned without review in substance due to their incompleteness, indicating a shift in the tide of ancillary restraints notified under separate concerted practice applications.
i. Anticompetitive concerted practices
In 2022, anticompetitive concerted practices accounted for 47% of all antitrust violations investigated by the AMC. All of them related to bid rigging. The total amount of fines imposed for these practices reached approximately EUR 9.5 million, a significant decrease from the EUR 195 million imposed in 2021. The construction and construction materials, telecommunications, heavy industry, agriculture, transportation, fuel and energy, and health protection industries were the main focus of investigations.
ii. Abuse of dominance
The AMC continued to investigate abuse of dominance cases in fuel and energy, transportation, and utilities. Notable investigations concerned abuses of dominance by undertakings involved in natural gas transportation and wholesale, wagon wheels supply, central heating, and maritime sphere.
iii. Unfair competition
Despite wartime conditions, the AMC remained active and implemented its merger filing requirement for notifiable transactions throughout the martial law period. Details on the AMC’s regime during martial law in Ukraine were previously provided in our newsletter.
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Despite wartime conditions, the AMC remained active and implemented its merger filing requirement for notifiable transactions throughout the martial law period. Details on the AMC’s regime during martial law in Ukraine were previously provided in our previous newsletter.