Pepeliaev Group advises that on 18 October 2023 the draft law “On amending ‎the Federal Law “On protecting competition” was published for public discussion on the federal portal of drafts of legal and regulatory instruments.

The Draft Law has been developed for the purposes of extending the grounds for reconsidering the contents or procedure for implementing instructions issued by the antitrust authority, in connection with a significant change of conditions for commodities to circulate on the commodity market. The amendments have been prepared further to an order of the Russian Prime Minister M.V. Mishustin.

It is expected that the amendments that have been adopted will come into force starting from the day when they are officially published.

Let us look at the planned new developments.

1. Amending the mechanism for instructions to be reconsidered within the framework of state control over economic concentration

Please be reminded that article 33(11) of the Law on Protecting Competition
 provides for a possibility to reconsider the contents or the procedure of performing an instruction issued based on the results of the antitrust authority’s consideration of a motion to provide consent for a transaction, or any other action subject to state control further to a petition
 of the person to whom the instruction was issued, as well as at the antitrust authority’s own initiative if material circumstances arose after the instruction was issued and make it impossible and/or unreasonable to perform the instruction in full or in part.

Such circumstances include: a change of product boundaries or geographical boundaries of the commodity market, the composition of sellers or buyers, or a loss of a dominant position by a business entity.

Please note that a significant amount of instructions of the Russian Federal Antitrust Service, which are still in force, provide for formulae for the calculation of the maximum level of a price on the domestic market, including based on price indicators on foreign markets. In addition, in the current political and economic conditions the need for change arises with regard to the approach to the pricing process established in such instructions.

At the same time, the list of grounds for instructions issued by the antitrust authority to be reconsidered within the framework of state control over economic concentration is exhaustive and contains no provisions allowing instructions to be amended taking into account a change of the condition and structure of markets.

The Draft Law provides for article 33(11) of the Law on Protecting Competition to be amended; specifically, it proposes to establish a new ground for the reconsideration of the contents of or the procedure for performing instructions: “non-compliance of the price formation guidelines specified in the instruction with the general conditions of the circulation of a commodity on the commodity market”.

It is also proposed to establish a possibility to extend the period for the antitrust authority to examine a petition for the reconsideration of an instruction up to two months in connection with the need to examine it additionally and to obtain additional information in order to decide whether to reconsider the instruction.

It is also worth noting that according to the current version of article 33(11) of the Law on Protecting Competition, instructions are reconsidered based on the principle of "non reformatio in pejus” (it is inadmissible to worsen the party's position which existed before the revision). At the same time, the version of the above article proposed by the Draft Law does not contain this provision and provides only that the changing of an instruction when it is reconsidered must correspond to a change in the conditions of a commodity's circulation that occurred on the commodity market.

2. Enshrining the procedure for reconsidering an instruction concerning the case on violation of antitrust legislation

The Draft Law also proposes to add new article 513 to the Law on Protecting Competition. This article provides for the procedure for reconsidering an instruction concerning a case on a violation of antitrust legislation in connection with a material change of the conditions for a commodity to circulate on the commodity market.

According to the Draft Law, an instruction concerning a case on a violation of antitrust legislation can be reconsidered at the initiative of the commission that issued such instruction and further to a petition of the person participating in the case. At the same time the change in the instruction must correspond to a change in the conditions for a commodity to circulate that originated on the commodity market. In turn, the grounds to reconsider such instructions are similar to those stipulated for instructions under article 33(11) of the Law on Protecting Competition.

It is proposed that a petition for the antitrust authority to reconsider an instruction concerning a case on a violation of antitrust legislation will be filed with the antitrust authority whose commission issued the instruction, by parties participating in the case, within three months from the date when they became aware or should have become aware of a material change of the conditions for a commodity to circulate on the commodity market.

At the same time, the above deadline is not a maximum and can be reinstated by the antitrust authority further to a motion of the person who filed the petition, provided that the motion was filed within six months from the date when grounds for the instruction to be reconsidered were identified, and the antitrust authority recognises the reasons for missing the deadline as valid.

It is proposed that the antitrust authority should return the petition to the applicant within ten days from the date when such petition was received, if the authority establishes that:

• requirements in terms of form and contents of the petition were not complied with;
• the petition was filed when the established deadline had expired and no motion for its reinstatement was filed or such motion seeking to reinstate the missed deadline was dismissed.

Under the general rule, the petition will by examined by the commission which issued the instruction, within a month from the date when the petition was received by the antitrust authority. The antitrust authority can extend the deadline for examining a petition by not more than two months owing to the need to examine it additionally, as well as to obtain additional information in order to decide whether to reconsider the instruction.

Based on the results of the examination of the petition the commission will decide either:

• to uphold the petition and to reconsider the instruction (in such case the commission issues a ruling to reconsider the instruction, and copies of such ruling are sent to parties participating in the case within three days from the date when the ruling was issued); or
• to dismiss the petition (the commission shall send such decision to the applicant within three days from the date the decision was adopted).

What to think about and what to do

We believe that the adoption of the Draft Law will facilitate the antitrust authority’s prompt response to changes in market conditions by expanding the list of grounds for reconsidering instructions issued by the antitrust authority.

We recommend becoming familiarised with the Draft Law and following up on its progress, then, if it is adopted, to take it into account when conducting professional activity.

Translated by the Translation Department of Pepeliaev Group