Competition Law and Advertisement

Give Away Cartel Accomplices

The year 2001 was important for Ukraine not only because the first Ukrainian Census was carried, but also due to the adoption of the Law of Ukraine “On Economic Competition Protection (the Law). The draft of this Law was prepared on the basis of the respective legislation of the European countries and the experts from these countries were involved.

The Law established the legal basis for the institute of granting immunity for the companies involved in a cartel. Such opportunity to give away the cartel’s ‘accomplices’ and avoid the penalty for the cartel participation (leniency programs) exists in the USA, Japan and many other countries. The leniency program is an effective way to quit an illegal cartel and to avoid a fine, the amount of which is significant for the cartel infringements. 

However, the Law established only general approach to leniency that made it impractical to apply for. In 2012, the specific procedure of applying for leniency and granting the immunity was, at last, adopted by the Antimonopoly Committee of Ukraine, the local competition authority.

After the application is filed with the Antimonopoly Committee of Ukraine, the applicant has to quit participating in the cartel and not to disclose the information about its having been applied for leniency. 

Do you know? In 2012, the Antimonopoly Committee of Ukraine fined Association Mebelderevprom, an association of furniture producers, and its fourteen members totally UAH 419 million (approximately EUR 40 million) for concerted bid rigging practices. This fine has been the largest for the whole history of the Antimonopoly Committee of Ukraine.   

 

Too many cooks …?!

Advertisement is one of the most ‘cherished’ by the controlling agencies spheres in Ukraine. There are eight ‘chefs’ who controls this ‘dish’:

  • State Inspectorate of Ukraine for Consumer Rights Protection, with respect to the protection of consumers in advertisement sphere;
  • Antimonopoly Committee of Ukraine, with respect to the economic competition protection issues;
  • National Television and Radio Broadcasting Council of Ukraine, with respect to advertisement on TV and radio;  
  • Ministry of Finance of Ukraine, with respect to advertisement of the state bonds (securities);
  • Securities and Stock Market National Commission of Ukraine, with respect to the stock market advertising;
  • Ministry of Regional Development, Construction, and Communal Living of Ukraine, with respect to residential buildings;
  • State Labour Inspectorate of Ukraine, with respect to job advertisement;
  • National Expert Commission for Protecting Public Morality of Ukraine, with respect to the compliance with the laws on protection of public morality while advertising.