Complaints procedure for private parties

Is there a procedure whereby private parties can complain to the authority responsible for antitrust enforcement about alleged unlawful vertical restraints?

Private parties may file complaints to the Antimonopoly Committee of Ukraine (AMC) bodies about alleged violations of the relevant competition laws. The complainants may either be parties to the relevant restrictive agreement or third parties. The filing and investigation procedure is governed by the Rules for Investigation of Antitrust Violations of 1994.

If not rejected on formal grounds, the complaint shall be reviewed by the AMC within 30 calendar days (extendable further by 60 calendar days if additional information is required). Review of the complaint is finalised by the issuance of the resolution to initiate or reject the initiation of the investigation of the case. The time of investigation on the substance is not limited.

Regulatory enforcement

How frequently is antitrust law applied to vertical restraints by the authority responsible for antitrust enforcement? What are the main enforcement priorities regarding vertical restraints?

No separate statistics are publicly available with regard to vertical restraints. Based on available general Antimonopoly Committee of Ukraine (AMC) statistics, the vertical restraints proportion is likely to be significantly below 15 per cent.

What are the consequences of an infringement of antitrust law for the validity or enforceability of a contract containing prohibited vertical restraints?

The Law of Ukraine on Protection of Economic Competition of 2001 does not declare agreements containing prohibited vertical restraints void per se. Respective provisions of an agreement and even the entire agreement may be rendered null and void by a court if requested by interested parties based on the AMC’s decision establishing the violation of Ukrainian competition law. Recent case law argues that agreements among shareholders aimed at the restriction or elimination of economic competition in the Ukrainian product markets are void. It is not clear whether the courts will extend this approach to cases regarding vertical restraints.

May the authority responsible for antitrust enforcement directly impose penalties or must it petition another entity? What sanctions and remedies can the authorities impose? What notable sanctions or remedies have been imposed? Can any trends be identified in this regard?

The Antimonopoly Committee of Ukraine (AMC) is entitled to impose fines for violation of Ukrainian competition law, including implementation of prohibited concerted practices, as well as to impose other obligations on the parties (eg, imposing conditions on the authorisation of the restrictive agreement or obliging the parties to terminate the violation). If the fine is not paid voluntarily, the AMC decision may be enforced in court.

No separate AMC statistics regarding fines for implementation of prohibited vertical restraints is available. According to the AMC Fining Guidelines of 2016 (recommendatory, but the AMC is committed to strictly follow these), the basic amount of fine for implementation of anticompetitive concerted practices (including vertical restraints) may be equal to either:

  • 10 per cent of the turnover of the undertaking from the sales of products on the relevant and adjacent markets for the period between the commencement of the violation and its termination or the AMC’s decision; or
  • in the case of concerted practices that may be individually exempted by the AMC or by the government: 5 per cent of the turnover of the undertaking from the sales of products on the relevant markets for the period between the commencement of the violation and its termination or the respective decision.

According to the above-mentioned Fining Guidelines, the AMC may apply coefficients (depending on the effect of violation on competition, social importance of the products, profitability of economic activity connected with violation) that may increase or decrease the fine. Also, in each case, the above basic amounts are subject to possible further adjustment for aggravating or mitigating circumstances.

Still, theoretically, the maximum possible fine may amount to up to 10 per cent of the group worldwide turnover of the infringing undertaking in the financial year preceding the year in which the fine is imposed.

Notably, in 2019, the AMC imposed a historically record-breaking total fine of 6.5 billion hryvnas for vertical restraints.

Investigative powers of the authority

What investigative powers does the authority responsible for antitrust enforcement have when enforcing the prohibition of vertical restraints?

The Antimonopoly Committee of Ukraine (AMC) has broad investigative powers, including the power to:

  • conduct on-site inspections of business premises and transport facilities;
  • request expert opinions;
  • request information or documents from the parties or other undertakings (or both), irrespective of their location;
  • retain or seize documents, items or information media that may contain evidence; and
  • engage police, customs and other enforcement authorities.

Failure to provide information at the AMC’s request or provision of incorrect or incomplete information, as well as prevention of the AMC’s inspections and other evidence-collection activities, is punishable by a fine of up to 1 per cent of the group worldwide turnover of the infringing undertaking in the financial year preceding the year in which the fine is imposed.

Private enforcement

To what extent is private enforcement possible? Can non-parties to agreements containing vertical restraints obtain declaratory judgments or injunctions and bring damages claims? Can the parties to agreements themselves bring damages claims? What remedies are available? How long should a company expect a private enforcement action to take?

An infringing party may be exposed to damages claims by aggrieved third parties (eg, competitors) and theoretically a party to a prohibited agreement is not precluded from recovering damages from the other parties to the agreement.

Persons that sustained damage as a result of an unauthorised or prohibited transaction may seek damages in court. Damages are awarded at twice the amount of the loss. Claims for damages are subject to a general three-year limitation period.