The largest fines imposed by the Antimonopoly Committee of Ukraine and its enforcement priorities in 2017

This is an overview prepared by Redcliffe Partners based on the decisions issued by the Antimonopoly Committee of Ukraine (the "AMC") during the period from January to December 2017.

Merger control violations*

  • Almost half of the decisions of the AMC to impose fines for merger control violations (56 out of 131 decisions) in the referenced period were issued in relation to foreign-to-foreign concentrations. The largest and the lowest fines for non-notification of foreign-to-foreign concentrations were EUR 13,700 and EUR 2,500, respectively.
  • 37 out of these 56 decisions with respect foreign-to-foreign transactions were issued within the "amnesty" procedure (for information purposes: until 15 March 2017, companies could submit corrective merger filings under the "amnesty" procedure subject to a fixed fine of EUR 3,600 for transactions which were completed before 15 September 2015).

* Please see pages 1-2 of the AMC Fines Review Table for more details

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Antitrust investigations carried out by the AMC

  • During the referenced period, the AMC particularly focused on investigating the following markets:
    • state procurement of wholesale crude oil and gas condensate;
    • supply and distribution of pharmaceutical products;
    • mobile communication services;
    • retail sales of petroleum and diesel fuel1; and
    • retail sales of liquefied petroleum gas1.
  • As a result of the above investigations, the following largest fines were imposed**:
    • a EUR 40.9 million fine (in total), which was applied to six wholesalers of crude oil and gas condensate for bid rigging by way of "cover pricing" (the wholesalers divided the lots by the closest location of the oil and gas fields and exchanged information on their bidding proposals);
    • a EUR 4.15 million fine (in total)2 was applied in a case alleging anticompetitive concerted practices between Sanofi Aventis Ukraine LLC and its two largest Ukrainian distributors, namely BaDM LLC and Optima-Pharm LLC. The AMC stated that off-invoice discounts provided to distributors, which were not passed on to end consumers, resulted in overpricing of Sanofi pharmaceuticals and restricted market access for cheaper generic substitutes;
    • after more than six years of investigation, the AMC imposed fines of approximately EUR 636,000 and EUR 581,000 on two mobile network operators, namely Kyivstar PrJSC and lifecell LLC, respectively, for spreading misleading information on tariff conditions for calls.

      In both cases, the AMC found that:

      (i) the operators indicated that the calls were billed "per second", while the cost of a full minute was charged as of the first second of the call; and

      (ii) consumers could obtain complete information on tariff conditions only by contacting a call centre after a SIM card activation, or by searching the official websites of the mobile network operators.

      According to the AMC, spreading misleading information on tariffs applicable to calls might have influenced consumers' choice in purchasing mobile communication services from these mobile operators.

** Please see pages 2-6 of the AMC Fines Review Table for more details

DOWNLOAD AMC Fines Review Table

1 Ongoing investigations; no fines have so far been imposed.

2 This is a significantly larger fine, if compared with total fines of EUR 126,000 and EUR 55,000 imposed by the AMC in two similar pharmaceutical cases in 2016 in relation to distribution practices of Servier Ukraine LLC and Alcon Pharmaceuticals LTD, respectively, investigated within the same probe dating back to 2012.

If you would like to receive further information in connection with the above, please contact Anastasia Usova or Nataliya Kovalyova.