A proposal that would introduce significant amendments to the Law on Protection of Economic Competition has been submitted to Parliament. The main proposed changes relate to dominant position and merger clearance.
At present, the law provides for a presumption of dominant position if an undertaking:
- has no competitors in the relevant market;
- has no competitors due to barriers to market entry;
- has a market share of over 35%, unless it can be proven that effective competition nonetheless exists;
- has a market share of below 35%, but no effective competition exists due to the relatively low market shares of its competitors; or
- has an aggregate market share of more than 50% in combination with up to three other undertakings or an aggregate market share of more than 70% in combination with up to five other undertakings, and no effective competition exists between the undertakings.
The proposal would simplify these criteria, introducing a presumption of dominance only if:
- the undertaking has a 50% market share;
- there are no competitors in the market; or
- barriers to entry prevent competitors from joining the market.
The proposed amendments would also redefine the threshold for concentrations, which would be triggered by a share purchase of more than 50% percent of the voting rights (instead of more than 25%, as at present).
Another much-discussed amendment would raise the corporate thresholds for merger clearance. Under the law as it stands, a merger must be notified to the Competition Authority if the asset value or the aggregate turnover exceeds:
- €12 million worldwide for all parties;
- €1 million worldwide for at least two parties; and
- €1 million in Ukraine for at least one party.
The proposal would introduce two options. The notification would be triggered if the asset value or aggregate turnover exceeds:
- €50 million for all parties and €4 million for at least two parties within Ukraine; or
- €50 million for at least one party within Ukraine and €50 million worldwide for at least one other party.
As at present, the turnover and asset values would include affiliated persons.
The proposed amendments can be seen as relatively progressive, as the existing merger thresholds are low and therefore almost every merger is assessed by the authority.
For further information on this topic please contact Oleh Malskyy or Yulia Yanyuk at Astapov Lawyers International Law Group by telephone (+380 44 490 70 01), fax (+380 44 490 70 02) or email ([email protected] or [email protected]).