Law of Ukraine “On Protection of Economic Competition”

with amendments and supplements introduced by the Laws of Ukraine

No 380-IV dated 26 December 2002,

No 762-IV dated 15 May 2003,

No 1344-IV dated 27 November 2003,

No 2285-IV dated 23 December 2004,

No 2505-IV dated 25 March 2005,

No 2596-IV dated 31 May 2005,

No 3486-IV dated 23 February 2006,

No 1276-VI dated 16 April 2009,

No 2850-VI dated 22 December 2010,

No 2856-VI dated 23 December 2010,

No 3567-VI dated 5 July 2011

(in the text of the Law the words “arbitration court” in all declinations were excluded pursuant to the Law of Ukraine No 762-IV dated 15 May 2003)

(in the text of the Law the word “court” in all declinations was replaced by the words “economic court” properly declined pursuant to the Law of Ukraine No 2596-IV dated 31 May 2005)

The present Law shall define legal grounds for the maintenance and protection of economic competition, for the limitation of monopolism in economic activities and shall be directed towards ensuring the efficient functioning of the economy of Ukraine on the basis of the development of competitive relations.

Section III ANTICOMPETITIVE ACTIONS OF BODIES OF STATE POWER, BODIES OF LOCAL SELF-GOVERNMENT, BODIES OF ADMINISTRATIVE AND ECONOMIC MANAGEMENT AND CONTROL
'''Article 15. Anticompetitive Actions of Bodies of State Power, Bodies of Local Self-government, Bodies of Administrative and Economic Management and Control'''

1. The issue of any acts (decisions, orders, directions, enactments, etc.), the making of written or verbal instructions, the conclusion of agreements or any actions or inactivity of bodies of state power, bodies of local self-government, bodies of administrative and economic management and control (a collegiate body or an official) which resulted or can result in the prevention, elimination, restriction or distortion of competition shall be considered as anticompetitive actions of bodies of state power, bodies of local self-government, bodies of administrative and economic management and control.

2. In particular, the following actions of bodies of state power, bodies of local self-government, bodies of administrative and economic management and control shall be considered as anticompetitive ones:

• prohibition against or the prevention from establishing new enterprises or performing entrepreneurship in other organisation forms in any sphere of activities and the placing of restrictions on performing certain activities, on the production, purchase or sale of certain types of products;

• direct or indirect compulsion of economic entities to join associations, concerns, inter-branch, regional or other forms of unions of enterprises or the coordinated concentration of economic entities in other forms;

(paragraph three of part two of article 15 with amendments introduced pursuant to the Law of Ukraine No 2596-IV dated 31.05.2005)

• direct or indirect compulsion of economic entities to conclude contracts with priority, to supply primarily a certain circle of consumers with products or to purchase products primarily from a certain circle of sellers;

• any action directed towards the centralised distribution of products and the distribution of markets between economic entities according to the territorial principle, according to the assortment of products, according to the volume of their sale or purchase or according to the circle of consumers or sellers;

• establishment of a prohibition to sell certain products from one region of the country to another or the granting of permission to sell products from one region to another only in a certain volume or provided that certain conditions are met;

• granting of such privileges or other advantages to some economic entities or groups of economic entities that place them in a privileged position in comparison with that of competitors, which results or can result in the prevention, elimination, restriction or distortion of competition;

• such an action that results in the creation of unfavourable or discriminatory conditions of activities for certain economic entities or groups of economic entities in comparison with the relevant conditions created for competitors;

• an action establishing such prohibitions and restrictions of the independence of enterprises that are not provided for by laws of Ukraine, including prohibitions and restrictions in terms of the purchase or sale of products, setting of prices, the charting of programmes relating to activities and development, the use of profits.

3. Anticompetitive actions of bodies of state power, bodies of local self-government, bodies of administrative and economic management and control shall be prohibited and shall entail responsibility according to laws.

'''Article 16. Prohibition Against Delegating Authorities of Bodies of State Power and Bodies of Local Self-Government'''

It shall be prohibited for bodies of state power and for bodies of local self-government to delegate some authorities to associations, enterprises, and other economic entities if this results or can result in the prevention, elimination, restriction or distortion of competition.

Section IV RESTRICTIVE AND DISCRIMINATORY ACTIVITIES OF ECONOMIC ENTITIES AND ASSOCIATIONS
'''Article 18. Restrictive Activities of Economic Entities and Associations'''

1. It shall be prohibited for economic entities and associations to induce other economic entities to commit violations of the laws on protection of economic competition or to facilitate committing that sort of violations.

2. It shall be prohibited for economic entities and associations to compel other economic entities:
 * – to be engaged in the anticompetitive concerted practices defined by Article 6 of the present Law;
 * – to be engaged in the concerted practices defined by Articles 7, 8, 9, and 10 of the present Law;
 * – to participate in the concentration of economic entities defined by Article 22 of the present Law.

'''Article 19. Unlawful Use of a Market Position by an Economic Entity'''

1. It shall be prohibited for economic entities which were granted authorisation for concerted practices in accordance with Article 10 of the present Law by the relevant bodies of the Antimonopoly Committee of Ukraine, for economic entities whose concerted practices are authorised according to Articles 7, 8, and 9 of the present Law to establish such restrictions with respect to economic activities of economic entities that, as a rule, are not applied to the relevant activities of other economic entities or to apply, without objectively justified causes, different approaches to different economic entities.

2. It shall be prohibited for economic entities which in accordance with Part 3 of Article 10 of the present Law were granted permission for concerted practices by the Cabinet of Ministers of Ukraine, irrespective of their monopoly position, to commit such actions that in accordance with Article 13 of the present Law are considered as abuses of a monopoly (dominant) position on the market.

3. It shall be prohibited for the economic entities mentioned in Part 1 of the present Article to induce other economic entities to provide, without objectively justified causes, advantageous conditions for economic activities.

4. The provisions of Parts 1 and 3 of the present Article shall also be applied to economic entities upon which small or medium-sized enterprises depend for lack of alternative sources of the receipt or supply of a certain type of products. It shall be considered that a seller of a certain type of products depends upon a buyer if the buyer gets, in addition to traditional price rebates or benefits in other forms, special benefit which is not got by other similar buyers.

'''Article 20. Discrimination Practised by Economic Entities Against Competitors'''

It shall be prohibited for economic entities having substantially greater market power in comparison with that of small or medium-sized entrepreneurs being their competitors to create barriers to economic activities of the small or medium-sized entrepreneurs, in particular to perform the actions prohibited according to Parts 1 and 3 of Article 19 of the present Law.

'''Article 21. Restrictive Activities of Associations'''

1. It shall be prohibited for an association to perform such activities by refusing to admit an economic entity to the association that place the economic entity at disadvantage with respect to competition if the refusal is groundless and unjustified.

2. Part 1 of the present Article shall be applied to associations if the following conditions with respect to the associations are satisfied:

• the association can unite all the participants in the relevant market or territory;

• the association is being established or is operating for achieving such aims that do not provide for earning a profit;

• the establishment and activities of the association result neither in economic concentration nor in anticompetitive concerted practices as defined in the present Law.