Ukraine: Highlights of Antitrust Enforcement: Annual Report 2023

Published on Mar 25, 2024

In the third year of the full-scale war in Ukraine, the Antimonopoly Committee of Ukraine (the "AMC") actively operates and maintains control over the competition law enforcement. In March 2024, the authority followed its tradition of releasing an annual report for the previous year (the "Report"), which contains a summary and statistics of the AMC’s activities, as well as depicts the most remarkable cases.

Merger control review

In 2023, the Ukrainian competition agency devoted plenty of time and efforts to the merger control field. The AMC’s active work resulted in 596 processed filings comparing to 530 in 2022. 254 of submitted 596 filings (i.e. 42%) were returned by the authority without review [NB: in 2024 we have seen a substantial decrease in rejection level], and 313 underwent substantive analysis (one was withdrawn).

Out of 312 applications cleared within Phase I, approx. 82% were reviewed under the regular procedure, and approx. 7% under fact track. The most common types of concentrations were:

  • acquisition of shares (64%);
  • acquisition of control (18%);
  • establishment of joint ventures (5%).

The number of Phase II cases increased to 14 in 2023 (4.5% of overall cleared applications) compared to 9 cases in 2022. 13 of the in-depth investigations ultimately resulted in clearances, 6 of which were conditional. Interestingly, in August 2023, the authority finished its review of a truly significant case – the acquisition by NielsenIQ of control over GfK, which resulted in the imposing the first over many years structural remedies, being the divestment of GfK’s consumer panel business.

In 2023, the AMC has seen 57 concerted practices filings (including those ancillary related to mergers) comparing to 47 in 2022.

In 2023, the most popular industries under AMC’s review merger control were the following:

· manufacturing sector (17.6%);

· fuel and energy (17.3%);

· agriculture (8.7 %);

· transport (5.8%);

· land and real estate (5.5%);

· finance (5.4%);

· construction (4.2%);

· other (35.5%).

Fines policy

During 2023, the AMC investigated 41 cases of failure to notify reportable transactions and imposed fines totalling approx. EUR 2.2 million.

Among these fines, one of the highest (approx. EUR 600,000) was levied on the global pharmaceutical producer Cheplapharm for implementation of notifiable foreign-to-foreign transactions without prior merger approval (in a gun-jumping context). Roughly the same fine of EUR 650,000 was imposed on each of BASF (chemical giant) and LetterOne (investment business founded by Mikhail Fridman and Petr Aven) for establishing a JV back in 2019 without the AMC’s prior approval. Aside from the large fine amounts, these cases are outstanding because of the AMC’s important conclusions. The authority clearly stated that “carve-out of Ukrainian territory does not allow the parties to avoid liability and a fine if financial thresholds provided by the Ukrainian competition law are exceeded by the parties”.

Another noteworthy case presented by the AMC involved the acquisition by Danfoss A/S of certain business from EATON CORPORATION plc. The parties originally obtained clearance valid until 24 June 2021 but completed the transaction later that year, subsequently informing the AMC of the delayed closing voluntarily. As a result of the parties' cooperation and voluntary disclosure of the violation, the AMC imposed a relatively small fine of approx. EUR 36,500 for closing the transaction after the deadline set by the initial clearance decision. The authority explicitly emphasized that transactions should be completed within the clearance validity period.

In terms of anticompetitive concerted practices, attention of the authority was focused on one specific type of them – all 2023 fines were imposed for bid rigging in public tenders.

As to unfair competition, the dissemination of misleading information emerged as the most prevalent form of unfair competition investigated by the AMC in 2023 comprising 79% of all cases examined. One of the highest fines of approx. EUR 430,000 was imposed on the Ukrainian wet wipes producer for unlawful use of packaging design.

Legislative developments

The previous year was also marked by outstanding and highly-awaited reform of Ukrainian competition laws which fortified and improved critical tenets of the existing legal framework, involving the following:

  • changes to the Competition Law and Merger Regulation aimed at, inter alia, abolishing the long-standing “seller attribution rule” under specific circumstances, amending the notion of “concentration“, updating the threshold tests, clarifying certain definitions and mechanism of JV’s financial indices calculation, empowering enforcement by the AMC and others (described in more detail in the SK alerts);
  • new Regulation on Determining the Amount of Fines;
  • new Regulation on Settlement for Cases of Anticompetitive Concerted Practices and Abuse of Dominance;
  • new Regulation on Leniency re Anticompetitive Concerted Practices;
  • new Regulation on Inspections Conducted by the AMC.

At the end of March 2024, the Ukrainian Parliament also introduced a temporary war-time exemption from the merger filing requirement that applies to concentrations aimed at acquiring new technologies for the military industry in Ukraine. Due to a large number of conditions, this exemption is unlikely to be widely used in commercial transactions.

Look into 2024

Traditionally, the Ukrainian competition agency outlined in the Report the markets which will be the top priority of its analysis and investigations in 2024: (1) fuel, (2) pharmaceuticals, (3) railway transport, (4) socially important products.