Currently, the business community and involved authorities are in active discussion over the so called “fourth antitrust package” – a number of amendments to the antitrust law developed by the Federal Antitrust Service of the Russian Federation (“FAS of Russia”).

It should be noted that the draft amendments are planned to materially reduce administrative interference into activities of the market players and administrative load on business.

As declared by the FAS of Russia, the amendments proposed by the fourth antitrust package are composed of:

• Amendments not included in the “third antitrust package” or subject to additional approval by authorities and the business community;

• ­Proposals made by the business community.

In particular, Federal Law No.135-FZ “On protection of competition” dated July 26, 2006 is planned to be amended as follows:

1. Notifications regarding economic concentration transactions are to be cancelled in full;

2. A ban on abusing market dominance is not to be placed on companies whose actions do not limit competition on the market in general but only impair non-business interests of certain entities;

3. A possibility of establishing state and municipal enterprises is to be limited;

4. Use of the warning system is to be materially expanded: overwhelming majority of cases on market dominance abuse and unfair competition cannot be initiated by the FAS of Russia without first sending a warning. If the concerned issue is rectified in time, the company should not be held liable;

5. Presidium of the FAS of Russia is to be established as an internal appeal authority;

6. Procedure for issuing administrative writs, including on publishing rules of trade practice, is to be regulated and will limit the list of conditions reflected in such writs. At present, the FAS of Russia determines such conditions at its own discretion;

7. Dominant position of a business entity with market share less than 35% is not to be acknowledged;

8. Requirement of the FAS of Russia pertaining to private company auctions is to be cancelled. Antitrust requirements should only cover mandatory auctions as set forth by the Russian laws;

9. Procedure for applying antitrust requirements to actions and agreements pertaining to the use of exclusive IP rights is to be specified. Antitrust requirements cover only the circulation of goods, not intellectual property;

10. Joint venture agreements are to be made acceptable and the notification procedure is to be determined.

At the same time, an attempt to tighten control over deals between companies within the same group and a requirement to develop and publish trade policies are being severely criticized by the business community.

It appears that these concerns are not groundless since the requirements in question may involve disclosures of company trade secrets.
However, we believe that such amendments, if adopted, will not affect operations of companies acting in full compliance with the antitrust legislation.

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Irina Akimova or Natalia Rossikhina, Moscow Office of Capital Legal Services.

This Information letter keeps the clients of the Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this Information letter shall not be deemed as legal opinions.