Russian Antitrust and Merger Control Rules: New and Improved

New rules, aiming to streamline Russia's anti-monopoly legislation (the so-called "third antimonopoly package"), came into force on January 6 and 7, 2012 (the "Amendments").

The new rules clarify existing provisions and simplify certain requirements but also impose tighter restrictions in some areas, as outlined in further detail below.

Cartels – Clear Definition and Absolute Prohibitions

The Amendments introduce the term "cartel" as an unlawful agreement between competitors in the market, and envisage a list of absolute prohibitions that will constitute a cartel. For example, competitors are prohibited from fixing or maintaining prices, dividing the market by territories or customers. Cartels are unlawful per se; and there is no need to prove their negative impact on competition for them to be recognized as such.

Under the new rules, cartels are now the only type of anticompetitive agreements which may entail criminal liability.

Softer Rules for Vertical Agreements

The Amendments clarify the definition of a vertical agreement. This is an agreement (including the one concluded between competitors) pursuant to which one party buys and the other sells a product(s). Agency agreements are not regarded as vertical agreements.

It is now permitted to fix maximum resale prices in a vertical agreement (previously, it was illegal to fix any resale price in a vertical agreement). The new rules also make it possible to argue that a vertical agreement is admissible (i.e. that it does not have an overall negative impact on competition) even when the agreement includes prohibited provisions.

Clarifications for Other Agreements Limiting Competition

The new rules provide a tentative list of cases when "other agreements" (apart from prohibited cartels and vertical agreements) can limit competition. Examples of such "other agreements" are joint venture agreements, agency agreements, any mixed type agreements, etc. Under the Amendments it is also possible to prove that such "other agreements" are permissible if they do not have a negative impact on competition.

Mitigation of Requirements for Concerted Actions

The Amendments clarify the term "concerted actions". Actions are now deemed concerted provided that the participants involved have been notified of the relevant behavior by a "public announcement" regarding the performance of such actions made by one of the participants. It is possible to argue that concerted actions are permissible.

In addition, concerted actions are now allowed for entities with an aggregate share in a relevant market not exceeding 20% and an individual market share not exceeding 8%.

Coordination of Third Parties' Activities
The Amendments clarify the term "coordination of economic activity" ("coordination of economic activity" means an adjustment in the activities of commercial entities by a third party which is not in the same group as such commercial entities). In particular, it is envisaged that a coordinator must operate in a market different from that of the coordinated parties. It is further specified that the parties' actions performed within the context of a vertical agreement shall not be regarded as coordination.

The new provisions ban coordination if it leads to breaches of the absolute prohibitions on cartels, as well as prohibitions specified for vertical agreements. At the same time, the Amendments envisage cases when coordination may be permitted (for example, by virtue of general exemptions for vertical agreements, if a share of a coordinator and coordinated parties in any market does not exceed 20%, or due to the absence of negative impact on competition).

Exemptions for Agreements, Concerted Actions, Coordination

The Amendments introduce an important novelty: certain but not all intra-group agreements (for example, those between a parent company and a controlled subsidiary, or between the companies being under the control of the

same person) are exempt from the prohibitions established for anticompetitive agreements and actions.

Moreover, prohibitions established for anticompetitive agreements and actions no longer extend to agreements for the provision or assignment of IP rights (this exemption used to apply only to cases of abuse of a dominant position).

New Prohibitions for State Authorities

The Amendments envisage additional prohibitions on actions and inaction of state authorities. The Amendments expressly prohibit creating discriminatory conditions for business entities, establishing and/or collecting payments which are not specified by Russian legislation when providing state and municipal services, and giving instructions to business entities to purchase goods, except when this is permitted by law.

Additional Criteria for Control over M&A Deals

Requirements for offshore transactions between foreign companies have been updated. Russian antimonopoly consent is now required for the acquisition of more than 50% of voting shares or other rights of control in relation to a foreign party, if that party supplied goods to the Russian market worth over RUB 1 billion (approx. USD 31.5 million) during the year preceding the date of the acquisition.

A new criterion has been introduced for determining asset thresholds for the purposes of merger control filings: it is no longer required to take into account the assets of the seller and its group, provided that as a result of the acquisition the seller and its group forfeit their rights of control in relation to the target company.

Mitigation of Liability

Administrative sanctions for violations have been softened, depending on the consequences of a specific breach.

First, the Amendments envisage fixed fines (up to RUB 1 million rubles (approx. USD 31,500) for legal entities) for certain types of antimonopoly violations (for example, for the abuse of a dominant position by a company which is not a natural monopoly, and for offences which are not related to restriction of competition).

Secondly, the new rules introduce differentiated fines for anticompetitive agreements in tenders (the amounts of fines vary from 10% to 50% of the initial value of the tender).

Turnover fines will continue to apply in other cases. However, when imposing these, the authorities should take into account mitigating and aggravating circumstances into account. Aggravating circumstances include organizing an anticompetitive agreement or action, or coercing a company into performing an anticompetitive action or into continuing to participate. Mitigating circumstances include situations where the company is not the organizer of an anticompetitive agreement or action or if where the company did not actually implement the anticompetitive agreement etc.

Furthermore, the new rules introduce the concept of a warning for certain cases of abuse of a dominant position, when a dominant player can be released from a fine.

Criminal liability is now applied only for cartels and repeated abuse of a dominant position (formerly it also applied for unlawful vertical agreements and concerted actions).

The Amendments grant to the Russian antimonopoly authority the right to revisit an antimonopoly case based on newly discovered facts.


For the most part, the Amendments set clearer and more flexible rules for business:

  • by permitting the setting of maximum resale prices;
  • by allowing parties to justify certain arrangements which might otherwise be illegal;
  • by recognizing that genuinely intra-group arrangements should not fall under prohibitions set forth for anticompetitive agreements and actions;
  • by setting clearer prohibitions for cartels, etc.

Nevertheless, certain contentious points remain unresolved (collective dominance, selective distribution, shareholder agreements, etc).

Baker & McKenzie