The Antimonopoly Committee (AMC) of Ukraine, in its second composition, has exposed over 1500 violations of economic competition laws during the past year. The budget has received UAH 2.2 billion, and the aggrieved parties have been paid a total UAH 51 million in damages. This is the rosy picture Oleksiy Kostusiev painted on the occasion of the first anniversary of his AMC chairmanship. Simultaneously, the committee chief believes entrepreneurs still make insufficient use of their legitimate right to be protected against unfair competition. The committee can only intervene on the basis of entrepreneurs’ petitions, which come in very seldom.
Perhaps the point is that businessmen now have many other, more efficacious methods to solve their problems than applying to the AMC.
Meanwhile, the AMC has concentrated on defending the rights of consumers on the so-called socially-important market. For example, it supports the idea of installing mini-boilers belonging to an association of apartment owners, which could undermine natural monopoly and thus create a competitive environment. However, the National Energy Regulation Commission has decided to supply these boilers with gas at a price set for enterprises, i.e., 1.3 times as high as for housing facilities. The Antimonopoly Committee rejects this attitude and has sent relevant proposals to the Cabinet of Ministers.
What compelled the committee to study the bread market situation was the fact that while grain prices dropped by 40% after a bountiful harvest in 2001, bread prices remained unchanged. As soon as this work began and made quite a stir, it was noticed that bread began to fall in price even without coercive measures. Bread prices have dropped by 12-14% lately all over Ukraine, for which Mr. Kostusiev thinks the committee is also responsible.
Mr. Kostusiev directly links oil product price rises in Ukraine with the increase of Russian export duties and worldwide oil prices. Simultaneously, he noted that Ukraine’s oil product market is undergoing certain structural changes: on the rise now are vertically-integrated economic entities comprising, as a rule, Russian or Kazakh oil suppliers and Ukrainian oil product processors and sellers. Yet, for some reason, the committee has discerned no market monopolization in this case. Still monopolized remain some regional fuel storage and retail trade markets, but the committee does not think they exert any influence on oil product price formation.
The committee also focuses on matters related to self-financing activities in police bodies. It was found, among other things, that resume forms for foreign-travel passports (costing 1.36 hryvnias) can only be purchased from specific economic entities, which offer a mandatory service to fill them out, thus boosting the price of forms from 15 to 40 hryvnias. The Antimonopoly Committee suggested that the Ministry of Internal Affairs put an end to this practice. “We think it necessary to draw up an exhaustive list of paid services for passport-issuing authorities and to supply the latter with the required blanks,” Mr. Kostusiev emphasized. The chairman revealed that the committee, together with the Ministry of the Economy, has drawn up a cabinet resolution on inventorying the types and methods of economic activity carried out by bodies of public administration: “It is absolutely necessary to lift restrictions on competition in the instances when public administration simultaneously carries out economic activities and performs an oversight function, i.e., is both player and judge.”
Commenting on the protracted conflict between the Kyiv-based Obolon and the Donetsk-based Sarmat, the two largest beer producers, Mr. Kostusiev pointed out that from the standpoint of current law Sarmat is doing legitimate business: it has the right to acquire a certain number of shares, without overstepping the threshold level. According to the committee, Sarmat has already bought 11.5% of the Obolon stock. But if the company reaches the earlier- announced level of 41.5% of shares, it will control 40% of the beer market, which Mr. Kostusiev says will be violation of the antimonopoly law. On the other hand, in Mr. Kostusiev’s opinion, the Donetsk region is a scene of active economic processes which involve enterprises that prefer to work within the framework of law. With this in view, “it is difficult to imagine that Sarmat will overtly break the law.” Making this forecast, the AMC chair perhaps hinted not so much at sanctions as at his good attitude toward the Donetsk-made beer.
