The Antimonopoly Committee of Ukraine considers that you abuse the monopoly (dominant) position in the market?

The Antimonopoly Committee of Ukraine considers that you abuse the monopoly (dominant) position in the market?

What is a monopoly?

Monopoly (from Greek “mono” – one, “poleo” – sell) – exclusive right (production, trade, fishing, etc.) belonging to one person, group of persons or state.

In accordance with Article 12 of the Law of Ukraine “On the Protection of Economic Competition”, an enterprise holds a monopoly (dominant) position on the commodity market if:

– in this market he does not have any competitor;

– it does not experience significant competition due to the limited access of other business entities to the purchase of raw materials and products, the availability of barriers for access to the market of other business entities, the availability of benefits or other circumstances.

How to determine if you have a monopoly (dominant) position in the market?

The current legislation clearly defines the criteria for the monopoly position of certain participants through the indicators of the volume of sales of goods, works and services in a particular market. In particular, a monopoly (dominant) is the position of a business entity if:

– his share in the commodity market exceeds 35%, and he has not proved that he is experiencing significant competition in the market;

– Its share in the goods market is 35 percent or less, but it does not compete significantly, in particular due to the relatively small share of the market owned by competitors.

In addition, the position of each of several economic entities is considered the monopoly (dominant) if the following conditions are fulfilled:

– the aggregate share of no more than three business entities, in which one market has the largest shares in the market, exceeds 50%;

– the aggregate share of no more than five business entities, in which one market has the largest shares in the market, exceeds 70%.

Maybe you are interested in the Antimonopoly Committee, if you are still a monopolist on the market?

The existence of monopoly power does not mean that the subject of business violates the current legislation. The violation is only abusive on the market by such a monopoly (dominant) position.

In turn, in accordance with the norms of the Law of Ukraine “On the Protection of Economic Competition”, the abuse of a monopoly (dominant) position on the market is:

1) the establishment of such prices or other conditions for the acquisition or sale of goods that it would not have been possible to establish at the conditions of significant competition in the market;

2) the application of different prices or different conditions to equivalent agreements with business entities, sellers or buyers without objectively justified for that reason;

3) the conclusion of agreements by the acceptance by the subject of business of additional obligations, which by their nature or according to trade and other honest practices in entrepreneurial activity do not relate to the subject of the contract;

4) restriction of production, markets or technical development that has caused or may cause damage to other business entities, buyers and sellers;

5) partial or complete refusal from the acquisition or sale of the goods in the absence of alternative sources of sale or purchase;

6) a significant limitation of the competitiveness of other entities in the market without objectively justified for that reason;

7) the creation of barriers to market access (exit from the market) or elimination from the market of sellers, buyers, and other business entities.

What sanctions against the AMC should be expected if the agency admitted that you are abusing your monopoly (dominant) position on the market?

For such a violation, according to the norms of the law, certain sanctions are provided, in particular:

– Imposition of a fine in the amount of up to 10% of the income (revenues) of the economic entity from the sale of products (goods, works, services) for the last reporting year preceding the year in which a fine is imposed;

– Compulsory division of the economic entity, which occupies a monopoly (dominant) position in the market;

– Obligations in cases of termination of illegal actions and their prevention in the future.

What to do to avoid the suspicions of the Antimonopoly Committee of Ukraine in abusing the monopoly (dominant) position in the market?

To do this, it is necessary to analyze their own economic activities for the presence of actions or inactivity, which can be recognized by the AMC as abusive monopoly (dominant) position.

However, such an analysis requires certain knowledge and understanding of the principles of regulating legislation on the protection of economic competition in general.

Therefore, it is better to apply to the professionals of ADS Legal Group, which:

– will check your company for the presence of signs of a monopoly (dominant) position;

– carry out an analysis of economic activity (behavior on the market);

– provide comprehensive and detailed consultations on the presence of signs of abusive monopoly (dominant) position;

– help you avoid accusations of abuse of this position.

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