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25 May 2022

Antitrust enforcement in Ukraine: 2021 highlights

Even during the wartime, the Antimonopoly Committee of Ukraine (the “AMC”) is keeping up by issuing its Annual Report for 2021 (the “Report”) covering last year’s activities. The Report covers the most remarkable cases and highlights important trends in competition policy for Ukraine.

Overall, 2021 turned out to be a hectic year for the agency, which worked at full pace. Our overview is devoted to the AMC’s key practices and trends in merger control and investigations.

Merger control

In 2021, the AMC reviewed 879 merger filings, while a year before this number reached 602 only. Local applicants took the lead, filing 569 applications, while foreign ones submitted 310 applications which is 35% out of the total amount. To compare, in 2020, foreign applicants’ filings reached 37%.

The total number of mergers approved in 2021 reached 592, against 477 in 2020. Interestingly, the AMC returned 255 applications as incomplete in 2021, which is more than twice as higher as in 2020 (104).

In 2021, the most common types of concentrations notified were: (i) acquisition of shares (75.7 per cent), (ii) acquisition of control (12.8 per cent) and (iii) establishment of JVs (1.9 per cent).

The majority of mergers reviewed (94.9 per cent) was cleared within Phase I review.

The number of Phase II proceedings decreased somewhat compared to the previous year: in 2021, the AMC reviewed 14 mergers within Phase II. All these were cleared, with only two mergers getting out under conditional approval.

Procedure stats 2021

~ 62 %366 applicationsregular Phase I review
~ 33 %196 applicationsfast track Phase I review
~ 2 %14 applicationsPhase II review
~ 2 %16 applicationspost-closing investigation

Mergers in the following spheres were in the biggest focus of the AMC in 2021:

  • land and real estate (20 %);
  • agriculture (19.6 %);
  • heavy industry (12 %);
  • fuel and energy (9.3 %), and
  • transportation (5.9 %).

Fines for failure to notify mergers

Notably, in 2021 the AMC investigated more cases on failure to notify a merger than in 2020 (61 against 47) and imposed drastically higher fines (EUR 5.1 million in total against EUR 303,000).

One of the biggest fines (approximately EUR 2.1 million) was applied to the local acquirer for deliberate failure to notify the acquisition of assets of three sugar plants.

Ancillary restraints notified

The AMC failed to turn the tide of ancillary restraints notified under separate concerted practice applications in 2021. 82 concerted practices applications were reviewed by the agency in 2021, and 50 of them were approved. The remaining 31 were returned due to incompleteness, while a single one was dismissed without rendering a decision.

Antitrust violations

Anticompetitive concerted practices

In 2021, anticompetitive concerted practices constituted 55% of all antitrust violations investigated by the AMC. As in previous years, most of them were bid-rigging cases (99%) rather than actual cartels. The cartels scrutinized by the AMC were “parallel behaviour” cases:

  • coal sellers were fined approx. EUR 24 million in total;
  • petrol suppliers and petrol stations operators were fined approx. EUR 146 million in total.

The total amount of fines imposed by the AMC for anticompetitive concerted practices reached approx. EUR 195 million in 2021, while in 2020, this amount was slightly above EUR 21 million only.

Key industries in the focus of investigations were construction and construction materials, fuel and energy, agriculture, transportation, and health protection.

Abuse of dominance

As in previous years, the AMC’s attention was drawn to abuse of dominance cases in fuel and energy, transportation, and utilities. The most notable investigations concerned abuses of dominance by regional natural gas transportation companies, water supply companies, port operators, etc.

Unfair competition

Traditionally, the most common type of unfair competition cases investigated by the AMC has been the dissemination of misleading information (82% of all cases).

The highest fines were imposed in the following cases:

  • EUR 320,000 for the dissemination of misleading information by a mobile operator;
  • EUR 50,000 for copying a competitor’s packaging design by a glue manufacturer.

* * *

The Report shows that the AMC keeps calm and carries on during the wartime. This is also confirmed by the fact that the merger filing requirement for notifiable transactions has remained in force during the martial law. The details on the AMC’s regime during the martial law in Ukraine are provided in our previous newsletter.

Our Team is happy to cover the Report’s further details and advise on the most efficient ways to submit a merger filing at these times. We are delighted to offer our clients practical solutions to protect them from potentially high fines for closing reportable transactions during the martial law in Ukraine.

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