IN RE Olga IVLYEVA is the head of competition practice at Wolf Theiss Kyiv
The Monopolist Pays Twice: Myth or Reality?
Mykhailo RAZUVAIEV is an associate at Wolf Theiss Kyiv
U
krainian antitrust law stipulates that damages caused by, among other things, abuse of dominance shall be compensated by the infringing party at double the amount. This rule is established by para 2 of Article 55 of the Law of Ukraine On Protection of Economic Competition No. 2210 of 11 January 2001 (the Competition Law). This article discusses how the above mechanism actually works in practice and whether it has proven to be an effective protective measure against the abuse of dominance or has a declarative nature only.
Regulatory framework and existing challenges
Apart from establishing the general rule on compensation of damages caused by abuse of dominance, Ukrainian antitrust regulations do not provide for any specific mechanism for exercising such right by afflicted persons. The relevant right to apply to court with a claim for compensation of damages caused by abuse of dominance is established by the Commercial Code of Ukraine. However, the Commercial Code does not establish any specific mechanism either. Unlike in the EU, where the practice of filing claims for compensation of damages is quite common, in Ukraine such practice is not yet widespread. The reasons behind this situation may include such factors as a lack of the established procedure for compensation of damages, absence of clear mechanism for calculation of damages, duration and complexity of the overall process, etc. It appears that the principal challenges for persons suffering from abuse of dominance are (i) difficulty in proving caused damages and their amount, and (ii) the ne-
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Determining persons
Unlike in the EU, where the practice of filing claims for compensation of damages is quite common, in Ukraine such practice is not yet widespread
cessity to establish and prove nexus between the abuse of dominance and caused damages.
The role of the Antimonopoly Committee
Article 55 of the Competition Law does not require the claimant to have a decision of the Antimonopoly Committee of Ukraine (the AMCU) in order to get compensated for caused damages. However, in accordance with the available court practice, the fact of abuse of dominance and the infringer’s guilt in each case was confirmed by the relevant AMCU decision. As stated by courts: (i) only the AMCU has the competence to detect and establish the fact of abuse of dominance, and (ii) the right to file a court claim arises from the moment of establishing the fact of abuse of dominance by the AMCU, rather than from the moment when the monopolist committed a violation. Therefore, in order to effectively proceed with the case on claiming damages for abuse of dominance, it is required to apply to the AMCU and ensure to obtain the relevant AMCU decision. As follows from court practice, only the AMCU decision may serve as admissible evidence of abuse of dominance and the infringer’s guilt.
May — June 2021 | The Ukrainian Journal of Business Law | www.ujbl.info
afflicted by abuse of dominance
With regard to persons who can claim compensation under Article 55 of the Competition Law, the relevant list is not established by the law. The law only specifies that these can be any persons who suffered damages as a result of the abuse of dominance. Therefore, it may in principle be argued that apart from persons who suffered from abuse of dominance directly (i.e. direct customers), the list of persons who can apply to a court for compensation of damages, at double the amount, may also include indirect customers and the infringer’s competitors. However, available court practice addresses only cases where damages were claimed by direct customers, and neither the AMCU nor courts commented on the possibility of claiming damages by indirect customers or the infringer’s competitors, including how to prove caused damages, their amount and causality in such cases. Therefore, in practice, it would be difficult (or even impossible), at least in the near future, for indirect customers/competitors to receive compensation for damages caused by an abuse of dominance.
Calculating the amount of damages
Based on available court practice, the amount of damages subject to compensation at double the amount was generally determined as the difference between (i) the costs actually incurred by the afflicted person as a result of and during the period of abuse of dominance, and (ii) the amount of reasonable expenses that the claimant could have had in the absence of such violation. Therefore, the amount of damages can be determined as the difference between
