INFORMATION LETTER OF THE SUPREME ECONOMIC COURT OF UKRAINE

of April 13, 2007 No. 01-8/229

About some questions of practice of application of the competitive legislation

Due to the origin in court practice of the questions connected using economic courts of the competitive legislation we consider necessary to pay attention to the following.

1. According to article 48 of the Law of Ukraine and article 30 of the Law of Ukraine "About protection against unfair competition" by results of hearing of cases about protection of the economic competition and protection against unfair competition bodies of the Antimonopoly Committee of Ukraine make decisions, obligatory for accomplishment, "On protection of the economic competition". According to instructions of part seven of article 40 of the Economic code of Ukraine (further - HK of Ukraine) decisions of the Antimonopoly Committee of Ukraine and its territorial departments can be appealed in court.

According to part two of article 4 of the Code of administrative legal proceedings of Ukraine jurisdiction of administrative courts extends to all public disputes, except disputes for which other procedure for the judgment is established by the law. Such other procedure is provided, in particular, by part one of article 60 of the Law of Ukraine "About protection of the economic competition" according to which instructions the applicant, the defendant, the third party have the right to appeal decisions of bodies of the Antimonopoly Committee of Ukraine fully or partially in economic court. Considering content of the given regulations, and also article 32 of the Law of Ukraine "About protection against unfair competition" cases on disputes on appeal of decisions (orders) of bodies of the Antimonopoly Committee of Ukraine are subordinated to economic courts and are subject to consideration by rules of the Economic Procedure Code of Ukraine (further - HPK). It concerns also hearing of cases in claims of bodies of the Antimonopoly Committee of Ukraine for collection from subjects of housekeeping of the amounts of penalties and penalty fee in connection with violation of the competitive legislation as such collection is performed according to the decisions of relevant organs made based on instructions of the called Laws of Ukraine. At the same time and 3 parts one of Article 12 GPK are determined by Item that put according to statements of bodies of the Antimonopoly Committee of Ukraine for the questions carried by legal acts to their competence are subordinated to economic courts.

2. In application of the mentioned instruction of part one of article 60 of the Law of Ukraine "About protection of the economic competition", and also the part two of article 47 of this Law to economic courts should consider the following.

According to these instructions the term of appeal of the decision of body of the Antimonopoly Committee of Ukraine provided by them cannot be resumed.

Thus, the corresponding terms are boundary, and the terms of realization of economic and legal responsibility determined according to article 223 of the Economic code of Ukraine do not extend to the corresponding legal relationship.

3. In hearing of cases on disputes on recognition invalid decisions of bodies of the Antimonopoly Committee of Ukraine on application of actions of responsibility for violation of the legislation on protection of the economic competition to economic courts it is necessary to check observance of special prescriptive limit, the stipulated in Article 42 Laws of Ukraine "About protection of the economic competition".

4. Violation by bodies of the Antimonopoly Committee of Ukraine of the competence of these bodies of adoption of decisions determined by the law by them shall have the investigation recognition of relevant decisions by economic court invalid.

The procedure for decision making by body of the Antimonopoly Committee of Ukraine is considered broken if such decision is signed by person which is not authorized on it.

As for non-compliance with the Antimonopoly Committee of Ukraine by body of other procedural rules in hearing of cases about violation of the competitive legislation or when conducting check of observance by the subject of housekeeping of the competitive legislation by it, it can have the investigation recognition of the relevant decision of such body by economic court invalid only in cases when the corresponding violation made impossible or significantly complicated clarification of the actual circumstances which matter for adoption of the correct decision on case, for example, the right of person who participates in case, on provision of proofs, petitions, oral and written explanations (objections), offers on questions which are submitted for examination and so forth is violated. If violation by body of the Antimonopoly Committee of Ukraine of procedural rules in consideration of the case about violation of the konkurentsionny legislation did not lead to adoption of the wrong decision on the substance of the case considered by it, then the economic court has no bases for recognition of the disputed decision invalid.

Recognition by economic court fully or partially invalid decisions of the Antimonopoly Committee of Ukraine or its bodies on the bases specified in part one of article 59 of the Law of Ukraine "About protection of the economic competition" is not obstacle for conducting by relevant organ new check of observance of requirements of the legislation on protection of the economic competition, market research and so forth for the purpose of elimination of violations or shortcomings which entailed recognition of the decision invalid. By results of such check adoption of other decision which, in turn, in case of disagreement with it interested persons can be appealed by them in accordance with the established procedure is possible.

5. According to parts six and the seventh article 12-1 of the Law of Ukraine "About the Antimonopoly Committee of Ukraine" decisions of administrative boards of the called Committee and its territorial departments are accepted respectively on behalf of the Antimonopoly Committee of Ukraine or on behalf of its territorial department.

Considering these legislative requirements, economic courts have no legal basis for the conclusion about absence at the relevant administrative boards of powers on decision making and application in case of appeal of these decisions in court of instructions of Item of 1 part one of Article 62 or Item of 1 part one of Article 80 GPK. At the same time as the parties in legal procedure Antimonopoly Committee of Ukraine or its territorial department which made the appealed decision act respectively.

6. Establishment by several subjects of housekeeping of the maximum retail prices cannot significantly limit competitiveness of other subjects of housekeeping in the market of certain types of goods as the last subjects could not suffer losses from establishment of maximum prices. With respect thereto economic courts need to mean that establishment of the maximum retail prices in the market of certain goods cannot be acknowledged anti-competitive coordinated actions in the form of essential restriction of competitiveness of other subjects of housekeeping in the market without the reasons which are objectively justified on that based on part two of article 6 of the Law of Ukraine "About protection of the economic competition".

7. Article 7 of the Law of Ukraine "About protection against unfair competition" to unfair competition refers illegal comparative advertizing, i.e. advertizing which contains comparison with goods, works, services or activities of other business entity (entrepreneur) and is not consumers, reliable, objective, useful to informing. For assignment of responsibility for comparative advertizing it is not required to prove the fact of decrease in demand for goods of business entity with which illegal comparison is carried out.

8. In check of correctness of application by bodies of the Antimonopoly Committee of Ukraine of Items 13 and 14 of article 50 of the Law of Ukraine "About protection of the economic competition" courts need to consider that the specified bodies are not limited in source selection for receipt of information necessary for accomplishment of their tasks, stipulated by the legislation about protection of the economic competition. Obligation provide information it is stipulated in Article 22-1 Law of Ukraine "About the Antimonopoly Committee of Ukraine", and the amount of required information shall answer informative circle of these tasks.

Courts in hearing of cases about failure to provide information or provision of information in incomplete amount to the Antimonopoly Committee of Ukraine, its territorial department should find out whether it was informed to the subject of housekeeping on need of provision of data by it and by what method, and also the reasons for which the information was not provided or provided out of time.

At the same time in the dispute resolution on the corresponding cases it is necessary to consider the following.

8.1. The law does not determine certain form of request of information in this connection it can be performed in any written form, except that about which there is direct prohibition of the law, taking into account, however, the fact that in case of objection by the subject of housekeeping of the fact of receipt of request by it about provision of information, the body of the Antimonopoly Committee of Ukraine shall submit to economic court competent evidences of sending of such request.

8.2. The facts of numerous failure to provide by one and by that the subject of housekeeping of information on requests of body of the Antimonopoly Committee of Ukraine is not the continuing violation in understanding of article 42 of the Law of Ukraine "About protection of the economic competition", and form independent (separate) violations of the law about protection of the economic competition.

8.3. Belonging of the data requested by body of the Antimonopoly Committee of Ukraine to information with limited access (which definition is given in article 30 of the Law of Ukraine "About information" on content of part three of article 22-1 of the Law of Ukraine "About the Antimonopoly Committee of Ukraine" does not exempt the company or the organization to which the relevant requirement is turned, from obligation to provide such information.

Consideration of cases by economic courts which materials contain confidential information can be performed in the closed judicial session according to the procedure, stipulated in Article 4-4 HPK, and cases which materials contain the state secret are considered in the closed judicial session with observance of rules of exclusive cognizance of cases (Article part four 16 GPK).

8.4. Provision of information upon the demand of the Antimonopoly Committee of Ukraine or its body at the scheduled time, but in incomplete amount, i.e. not according to all requirements of the corresponding request, cannot be identified with failure to provide information at the scheduled time as it is the different, independent violations of the law about protection of the economic competition determined by Items 13 and 14 of article 50 of the Law of Ukraine "About protection of the economic competition".

9. For qualification of actions of the subject of housekeeping as abuse of the exclusive (dominating) market position is not obligatory clarification of effects in the form of drawing losses for his competitors and consumers or other real violation of their rights or interests as establishment of the fact of making of abuse is sufficient (for example, goods offering at exclusively high prices, the conclusion with different consumers of equivalent agreements which contain the different prices or other conditions without the reasons which are objectively justified on that, and so forth) and possibilities of approach of the corresponding effects. Economic courts with respect thereto need to find out and display more exhaustively in judgments what negative effects or other violation of the rights or infringement of interests of subjects of housekeeping or consumers could be caused by abuse of the exclusive (dominating) market position.

10. In permission of the matters of argument connected with determination by bodies of the Antimonopoly Committee of Ukraine of the monopoly (dominating) position of subjects of housekeeping on certain commodity markets, economic courts should mean the following.

10.1. Establishment of the monopoly (dominating) position of the subject (subjects) of housekeeping includes application of both structural, and behavioural indicators which characterize competitive situation in the market. At the same time application of structural indicators is predetermined by establishment of subject of the analysis, determination of commodity, territorial (geographical), hour borders of the market based on information which can be used for determination of the monopoly (dominating) position.

10.2. Business activity provides market research of certain goods (and provision of certain services) and therefore subjects of housekeeping shall realize possibility of approach of certain restriction of their activities and responsibility for violation of the competitive legislation.

10.3. Prove obligation in court of the fact of occupation by the subject of housekeeping of the exclusive (dominating) market position it is assigned to the Antimonopoly Committee of Ukraine or its territorial department which is party litigant.

10.4. Economic courts in hearing of cases shall check correctness of application by bodies of the Antimonopoly Committee of Ukraine of the corresponding precepts of law, in particular, of the Technique of determination of the monopoly (dominating) position of subjects of housekeeping in the market approved by the order of the called Committee of 05.03.2002 of N 49-p. However economic courts shall not touch on themselves functions not inherent in court which are performed only by bodies of the Antimonopoly Committee of Ukraine, and again to establish commodity, territorial (geographical), temporary borders of certain goods markets and therefore as it is made the specified bodies, and based on it to do the conclusions about availability or lack of the monopoly (dominating) position of the subject of housekeeping in the market.

11. In hearing of cases on the disputes connected with monopoly abuse in the market, economic courts it must be kept in mind that the list of actions provided in Article 29 by the Civil Code of Ukraine which is recognized such abuse cannot be considered exhaustive. According to the instruction of part one of Article 41 of Civil Code of Ukraine the legislation which governs the relations which arise in connection with unfair competition, restriction and the prevention of monopolism in economic activity consist of this Code, the law on the Antimonopoly Committee of Ukraine, other legal acts. The Law of Ukraine "About protection of the economic competition" which contains as determination of the concept "abuse of the exclusive (dominating) market position" (Article part one 13), and the list of the corresponding actions or divergence (part two of this Article) which has also no exhaustive nature also belongs to such legal acts.

12. Article 48 of the Law of Ukraine "About protection of the economic competition" to powers of bodies of the Antimonopoly Committee of Ukraine refers, in particular, decision making about the termination of violation of requirements of the legislation on protection of the economic competition.

The Item determines 7 parts two of article 13 of the called Law as one of abuses of the exclusive (dominating) market position of creation of obstacles of access to the market.

Considering the specified instructions, economic court it must be kept in mind that taking into account circumstances of specific case the unreasonable refusal of the entrepreneur of the conclusion of the public agreement (Article 633 of the Civil code of Ukraine or) the party which provided the agreement for accession (article 634 of the called Code) can be qualified as violation of the law about protection of the economic competition if the relevant party or the entrepreneur holds the monopoly (dominating) position in certain market.

13. The law does not assign to the Antimonopoly Committee of Ukraine and its bodies control of pricing in the field of use of free prices and rates. At the same time according to Item of 1 part two of article 13 of the Law of Ukraine "About protection of the economic competition" establishment, in particular, of such prices which could not be established under living conditions of the considerable competition in the market is qualified as abuse of the exclusive (dominating) market position. Therefore economic courts in the dispute resolution should mean that the specified bodies can exercise control of observance of requirements of the legislation on protection of the economic competition and in establishment and use of free prices and rates.

14. In hearing of cases on the disputes connected with protection of business entities (entrepreneurs) and consumers against unfair competition and at the same time - with protection of intellectual property rights, economic courts taking into account circumstances of specific case should be guided, except the Law of Ukraine "About protection against unfair competition", by instructions of the Parisian convention on protection of industrial property of 20.03.1883 (Date of Introduction in action for Ukraine - 25.12.1991) which provides obligation of the participating countries in article 10bis to provide to citizens of these countries effective protection against unfair competition and contains determination of the act of unfair competition on industrial and trade cases. According to Item (2) article 1 of this Convention objects of protection of industrial property are patents for inventions, useful models, industrial designs, trademarks, service marks, trade names and instructions about origin or the name of the place of origin, and also the termination of unfair competition.

15. In the dispute resolution, the actions connected with assessment or divergence of subjects of housekeeping as approved competitive behavior (Article 5, parts the first or fourth article 6 of the Law of Ukraine "About protection of the economic competition", to economic courts it is necessary to find out and check due means of proof the actual circumstances connected with availability or lack of direct influence of such actions (divergence), for example, agreement signature or decision making in any form for conditions of production, acquisitions or realization of certain goods, including for such parameters of the market as possible sales amounts, overall price level in the market and so forth.

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info