Get permission for concerted action or concentration from the Antimonopoly Committee of Ukraine?
What is concerted action?
In accordance with the norms of current legislation, concerted actions are the conclusion by economic entities of agreements in any form, the adoption of decisions by associations in any form, as well as any other coordinated competitive behavior (activity, inaction) of economic entities.
Coordinated actions are also the creation of a business entity, an association, the purpose or consequence of which is the creation of coordination of competitive behavior between business entities that created the specified business entity, association, or between them and the newly created business entity or joining such an association.
What is concentration?
The Law of Ukraine “On Protection of Economic Competition” defines the concept of concentration:
1) the merger of business entities or the merger of one company to another;
2) the acquisition directly or through other persons of control by one or several business entities over one or several business entities or parts of business entities.
3) the creation of a business entity by two or more business entities for a long period will independently carry out economic activities, but this creation does not lead to coordination of competitive behavior between business entities that created this business entity, or between them and the newly created business entity ;
4) directly or indirectly acquiring, acquiring a property in another way or receiving shares in management (stocks, units), ensures or achieves 25 or 50 percent of the votes in the supreme management body of the relevant business entity.
Who should get permission for concerted action or concentration?
Participants of concerted actions, participants of concentration, authorities, local authorities, administrative and management bodies, can apply for a permit for concerted actions to the Antimonopoly Committee of Ukraine or its territorial branches, and to apply for a permit for concentration only to the Antimonopoly Committee of Ukraine.
The AMCU does not agree on concerted actions if they significantly restrict competition in the entire market or in a large part of it and will not give permission for concentration if it leads to monopolization of markets or restriction of competition.
How does the AMCU consider received applications for concerted action or concentration?
In accordance with clause 2 of Article 26 of the Law of Ukraine “On Protection of Economic Competition”, the application is considered accepted for consideration after 15 days from the date of its receipt, if during this time the Antimonopoly Committee of Ukraine did not return to the applicant a statement stating that it and other documents comply with the requirements established by the Antimonopoly Committee of Ukraine and this prevents its consideration and, if the concentration is not prohibited in accordance with the Law of Ukraine “On Sanctions”.
The application for granting permission for concerted actions is considered by the Office within three months from the date of its acceptance for consideration by the relevant body of the Antimonopoly Committee of Ukraine, and the application for granting permission for concentration – within thirty days from the date of its acceptance for consideration.
Can the AMCU refuse to consider the application?
Yes, it can. There are several cases where the agency may leave the application without consideration, namely:
– in case of receipt from the applicant of an application for withdrawal of the application and if the concentration is prohibited in accordance with the Law of Ukraine “On Sanctions”, which is the order of the relevant authorities of the Antimonopoly Committee of Ukraine.
– in case of failure of the applicants to provide information about the ultimate beneficial owners (controllers) of business entities – participants of concentration.
However, leaving the application without consideration does not deprive the applicant of the right to apply to the Antimonopoly Committee of Ukraine or its territorial offices with a repeated application.
What will happen if you do not submit to the AMCU an application for granting permission for concerted actions or concentration of business entities?
In accordance with the current legislation, for concentration without obtaining the relevant permission of the Antimonopoly Committee of Ukraine, if the presence of such permission is necessary and for the business entities agreed actions prohibited by law, AMCU can fine you.
Expect a fine of up to 5% percent of the income (revenue) of a business entity from the sale of products (goods, works, services) for the last reporting year preceding the year in which the fine is imposed.
Therefore, in order to avoid misunderstandings with the Antimonopoly Committee of Ukraine, you should seek professional legal advice from professionals. In particular, the company ADS Legal Group will help you determine the need for permission to concentrate (analysis of the documents provided, analysis of the formation of a group of related persons) and prepare all the necessary documents for obtaining permits for concentration or concerted action.