Penalties for the Violation of Legislation on Protection of Economic Competition will be Determined by the Approved Methodology

The draft Law #2431 dated 19.03.2015 “On amendments to the legislation on protection of economic competition determining the amount of fines imposed by the bodies of the Antimonopoly Committee of Ukraine for the violation of legislation on economic competition protection” is currently under consideration.

This draft law provides that in the process of determining the penalty amounts for the violation of legislation on protection of economic competition the Antimonopoly Committee of Ukraine should apply the methodology for the calculation of the amounts of penalties imposed by the bodies of the Antimonopoly Committee of Ukraine for the violation of legislation on protection of economic competition approved by the Resolution of the Antimonopoly Committee of Ukraine (hereinafter the “Methodology for Penalty Calculation”).

As of today, the procedure for the definition of the penalty amounts by the bodies of the Antimonopoly Committee of Ukraine for the violation of legislation on protection of economic competition by business entities is regulated by the provisions of Article 52 of the Law of Ukraine “On the protection of economic competition”, which defines, in particular, the maximum possible penalty amount for the violation of legislation on protection of economic competition, leaving the decision about a particular penalty amount to the discretion of the Antimonopoly Committee of Ukraine.

Such situation creates potential possibilities for selective (discriminatory) approach to the definition of the penalty amount for the same violation of legislation on protection of the economic competition for different business entities.

In view of the above and in order to fulfil the obligations under the Agreement of Association between the EU and Ukraine, this draft law seeks to introduce the use of the Methodology for Penalty Calculation by the Antimonopoly Committee of Ukraine, which must be developed by the Antimonopoly Committee of Ukraine in case of acceptance of this draft within a two-month term from the day when the law enters into force.

In addition, the current legislation does not define mitigating or aggravating factors that might accordingly influence the amount of penalties for violations, and the appeal procedure against the decision of the Antimonopoly Committee of Ukraine in terms of the imposition of penalties and obligations.

The draft law also provides for the right of a business entity to appeal to the Economic Court against the decision of the bodies of the Antimonopoly Committee of Ukraine in terms of imposition of penalties and/or obligations for the rectification of violations of legislation on protection of economic competition and, accordingly, the court can leave the established penalty amount and/or established obligations without any changes, decrease the penalty amount, change the established obligation, or recognize the decision of the body of the Antimonopoly Committee of Ukraine as invalid in terms of the imposition of penalties and/or establishment of obligations for the rectification of the violation of the legislation on protection of economic competition. The application of the Methodology for Penalty Calculation is also mandatory for the court in the decision-making process for such appeals.

In case of approval of this draft law, its provisions shall be effective on the next day after the publication of the Law.