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INTERNATIONAL CONFERENCE ON TOPICAL ISSUES OF COMPETITION POLICY IN THE POST-CRISIS PERIOD

INTERNATIONAL CONFERENCE ON TOPICAL ISSUES OF COMPETITION POLICY IN THE POST-CRISIS PERIOD. Topical Issues of the Competition Policy in Ukraine in the Post-Crisis Period. R. Kusmin, First Deputy Chairman of the Antimonopoly Committee of Ukraine (AMCU”. Almaty , Republic of Kazakhstan , 2011.

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INTERNATIONAL CONFERENCE ON TOPICAL ISSUES OF COMPETITION POLICY IN THE POST-CRISIS PERIOD

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  1. INTERNATIONAL CONFERENCE ON TOPICAL ISSUES OF COMPETITION POLICY IN THE POST-CRISIS PERIOD Topical Issues of the Competition Policy in Ukraine in the Post-Crisis Period R. Kusmin, First Deputy Chairman of the Antimonopoly Committee of Ukraine (AMCU” Almaty, Republic of Kazakhstan , 2011

  2. Impact ofAdverse Economic Factors on Competitive Environment in the Post-crisi Period • Weaker investment processes; • Stronger concentration processes in product markets; • Higher risk of anticompetitive action on the part of government authorities taken in order to mitigate the manifestation and consequences of financial and economic crisis; • Higher risk of adverse impact of government assistance to companies on competition.

  3. AMCU’s Priority Tasks in the Post-Crisis Period • ensuring systematic protection of competition and consumer interests in socially important markets; • efficiency improvement of intervention by the Committee agencies, resolute suppression of misconduct; • identification of barriers preventing development of competition and implementation of economic reform, submission of proposals to the government on removing such barriers; • drafting the legislation on government assistance business entities.

  4. AMCU Operation Results (1)for 8 months of 2011 • 3078 applications received by the Committee; • 2619 offences terminated including: 1022 cases of monopoly abuse; 196 cases of anticompetitive behavior of business entities; 596 cases of anticompetitive behavior of government authorities; 148 cases of unfair competition; • the amount of fines charged to the wrongdoers exceeded UAH 263 million

  5. AMCU Operation Results (2)Housing and Public Utilities Sector • In 2010-2011, the agencies of the Committee made decisions on termination of nearly thousand violations of law on protection of economic competition; • In 2011 we held more than 3000 inspections of companies, central and local government authorities; • Over 110 cases were initiated; • More than 190 recommendations to central and local government authorities and business entities.

  6. Over 2100 draft draft laws and regulations examined in 9 months of 2011; More than 1500 recommendations given to central and local government authorities oriented towards development of competition and business; Over 3700 publications and interviews in the mass media, round table discussions, seminars, and meetings attended by representatives of government and business. AMCU Operation Results (3)Competition Advocacy

  7. Fraudulent Scheme in Operation of Association of Apartment House Owners The developer and some apartment owners founded an Association of Apartment House Owners (“the Association”) Agreement between the developer and investors (owners of the apartment to be built) For admission to the Association, new members (other apartment owners) had to pay UAH 100,000 as the so-called “membership fees” The Association made an house management agreement (for 50 years) with the operation company founded by the developer The Developer forced all apartment owners to sign house maintenance agreements with the said operation company Hard-selling auxiliary paid services to residents. Rates are 1.5-2 times higher

  8. Some Cases Examined by AMCU (1)Air Transportation Market In the air navigation period (winter 2010-2011) Dniproavia and Aerosvit were the only air carriers on many domestic routes. Air ticket prices on such routes were 1.3-1.8 times higher compared to the routes operated by multiple carriers. The Committee bound Dniproavia and Aerosvit to lower their service rates on the said routes. The Committee bound Dniproavia to ensure that Ukrainian International Airlines have slots in Dnepropetrovsk International Airport .

  9. Some Cases Examined by AMCU (2)Unfair Advertising Kapitoliy LLC (Zhytomyr) distibuted advertisements contained misleading terms of loan borrowing and repayment. According to the advertisements, the loan would be borrowed immediately and repaid for 15 years. In fact the loan was extended out of monthly contributions of other depositors until the required amount of the loan is achieved that would take years. No deposits were refunded on cancellation of the agreement. The Committee fined the wrongdoer for UAH 497 thousand. The case papers were submitted to agencies of the Ministry of Interior, which initiated a criminal case based on the fact of fraud. In order to prevent such misconduct, the Committee initiated the relevant legislative amendments.

  10. Some Cases Examined by AMCU (3)Pledged Property Insurance The Committeemade 5 decisions on abuse of monopoly by commercial banks in retail lending. In their retail lending the banks demanded signing of insurance agreements with the specific insurance companies. This being the case, the banks’ clients were actually unable to select the insurance company. The wrongdoers were fined for a total of UAH 450 thousand.

  11. Thank you for your attention

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