Legal alert «The 5th russian animopoly package» draft law: analysis of amendments and possible influence on doing business

Federal Antimonopoly Service (the FAS Russia) developed a set of amendments to the Federal Law on Protection of Competition («5th Antimonopoly package»). The main aim of amendments is to regulate economic relationships in the era of digital economy. The draft law provides new terms, sets new criteria to recognize a dominant position and offers new ways to approach questions related to market power concentration.

This draft law is currently being reviewed by the Government of Russia before going through the legislature.

The draft law provides new criteria for determining the dominant position of owners of digital platforms (infrastructure). Thus, owners of digital platforms could be considered as dominant players if such digital platform has a share of more than 35 percent within the market of interchangeable services delivered through digital platforms facilitating interaction between sellers and buyers. Such market player will be regarded as dominant if network effect based on the number of users of the digital platform, gives the opportunity to exercise a decisive influence on the general conditions for the commodity circulation in the relevant market and (or) to eliminate other players from this market, and (or) to impede access of other players to this market.

On the other hand, owners of a digital platform with revenue for the latest calendar year not exceeding 400 million rubles will not be designated as dominant players.

We presume that in practice the use of such criteria may lead to the recognition of a significant number of large digital legal entities (owners of digital platforms, online aggregators and services) as dominant players on relevant markets.

The draft law provides new criteria that trigger necessity of clearing a transaction through the FAS Russia. Under proposed changes, approaches to controlling transactions of economic concentration should change as traditional criteria based on book value of assets or revenue may not reflect the real impact of acquisition on competition. Considering the above, a new condition will be introduced – price of purchase (clearing will be necessary if price exceeds seven billion rubles).

The FAS Russia also plans to qualify the usage of special pricing assist tools (such as price algorithms that allow monitoring and controlling prices within a particular market) as an «aggravating circumstance» when imposing administrative fine if such activity leads to violation of competition on relevant market.

The draft law also gives new powers to the FAS Russia in the event that a business entity fails to comply with the requirements related to the use of intellectual property. **>**to file a court claim for the permission to use in the territory of the Russian Federation the intellectual property of a violator if these intellectual property rights are abused by such violator;

**>**to file a court claim with the request to prohibit (restrict) the sales of goods by a violator in the territory of the Russian Federation of if these goods were produced by abusing these intellectual property rights.The adoption of the draft law by the Russia Parliament is expected in 2019, however, it is possible that due to elimination of controversial issues and taking into account business’s point of view new amendments will be made to the current version.