The Organization for Economic Cooperation and Development (OECD) has recently presented in Kyiv its first external assessment of the situation with Ukraine’s policy and legislation on competitiveness. In general, the international impression was positive. Nevertheless, there was also much criticism of the Ukrainian side.
What regards the activities of Ukraine’s Antimonopoly Committee (AMKU), the international experts were most of all interested in the insufficient transparency of its decision-making process, excessive focus on the misuse of the monopoly situation by companies (when it should rather focus on discovering of cartel plots), an imperfect system of collecting fines, and the politically motivating order of appointing of the committee’s head.
On this basis the experts suggested implementing a more efficient system of control over the anti-competitive state aid, strengthen the investigatory authority of the AMKU by permitting the committee to conduct a search of office premises and confiscate evidence, work toward a system of independent regulators among natural monopolists, introduce criminal responsibility for creating cartels, depoliticize the order of appointing the AMKU’s head, etc.
The acting head of the AMKU Oleksandr Melnychenko, who was present at the presentation, promised to take into account all these propositions in the future. However, he did not like some of the remarks. For example, Melnychenko does not think that too much attention is being paid to antimonopoly violations. To prove his point, he cited as an example the statistics of 2008, when his department discovered 150 cartel plots. “This year, I believe, their number will not be lower,” Melnychenko added. There would be more if cartel plots were criminally punishable. However, today criminal responsibility for violating the competition legislation is envisaged only for cases of physical or psychological coercion to coordinated actions on the market. No criminal cases have been tried at court under this clause. So, in Melnychenko’s opinion, criminal responsibility should be introduced as soon as possible.
But how effective will it be in the current conditions of economic and, above all, political crisis in which each regulator is running the risk of becoming a mere tool in a big political game? “When a country has very high political risks and political instability, this has a direct bearing on whether it is easy or difficult to fight for fair competition. High political risks mean a desire to use political power and one’s possibilities in order to reach concrete business targets. In the conditions of high political risks, there are always political interventions into business, which may break fair competition,” MP Iryna Akimova said. “There are also tendencies when the executive branch of power tries to take over the functions that the AMKU should fulfill.” She cited a recent example when the government tried to use administrative methods to resolve the price issue on the medication market. According to the law, the Antimonopoly Committee should have dealt with this problem.