The Fifth Antimonopoly Package

Starting from September 1, 2023, the Federal Law No. 301-FZ "On Amendments to the Federal Law on Protection of Competition" (the “Law No. 301-FZ”, the "Fifth Antimonopoly Package") comes into effect.

The Fifth Antimonopoly Package was adopted in response to the growing share of e-commerce in Russia, with the aim of creating effective mechanisms to protect citizens from potential abuses in the digital space. This was stated by the Deputy Head of the Federal Antimonopoly Service of Russia, Sergey Puzirevsky, during the XI St. Petersburg International Legal Forum (https://fas.gov.ru/news/32554).

The most important provisions of the Fifth Antimonopoly Package include the following:

• Introduction of the concept of "network effect"

In Law No. 301-FZ, the "network effect" is understood as the property of a commodity market (commodity markets) in which the consumer value of a digital platform, facilitating transactions between sellers and buyers, changes depending on the number of such sellers and buyers.

• Criteria for determining the dominant position of economic entities have been defined

According to Law No. 301-FZ, the activities of owners of digital platforms, through which transactions between third parties are conducted, are prohibited if the following conditions are met collectively:

- Presence of network effect;

- Revenue for the previous year exceeds 2 billion rubles;

- The share of transactions between sellers and buyers through the digital platform exceeds 35% of the total value of transactions conducted in the corresponding commodity market.

• It is determined that transactions exceeding 7 billion rubles require approval from the Federal Antimonopoly Service (FAS) of the Russian Federation

According to Law No. 301-FZ, transactions exceeding 7 billion rubles will require prior approval from the FAS of the Russian Federation.

Prior to the amendments, the following circumstances were the grounds for prior approval from the FAS of the Russian Federation:

- Total value of assets exceeding 7 billion rubles;

- Total revenue exceeding 10 billion rubles, with the total value of assets according to the latest balance sheet of the object of economic concentration exceeding 800 million rubles.

An article is provided stating that the Federal Antimonopoly Service (FAS) of the Russian Federation, when considering petitions for consent to a transaction, has the right to appoint an expert examination and involve experts to conduct it.

Expert examination may be appointed for:

- Considering petitions for consent to the implementation of a transaction or other actions subject to state control;

- Considering cases of violation of antimonopoly legislation;

-  Monitoring compliance with prescriptions issued as a result of considering petitions for the approval of economic concentration transactions.

• The procedure for considering petitions for consent to a transaction has been clarified

According to Law No. 301-FZ, before making a decision on granting prior consent, the antimonopoly authority may request an opinion on the circumstances of the petition for consent.

After reviewing the opinion on the circumstances of the petition for consent, the parties to the transaction will be able to provide explanations regarding the circumstances identified by the antimonopoly authority.

In general, the Fifth Antimonopoly Package contains positive changes for consumers of digital platforms: both for those who purchase goods and services on such platforms, and for those who place their goods and services on them. For the former, the benefit lies in a more fair competitive environment, which leads to increased competition, resulting in an increase in supply and a decrease in prices. For the latter, fair rules allow for more effective operations in the digital space.

However, the Fifth Antimonopoly Package also has several drawbacks that may lead to abuse by monopolists:

- Firstly, there is a lack of clarity regarding the need to remove antimonopoly immunities from Law No. 301-FZ;

-  Secondly, the changes do not apply to the free provision of goods (social networks, navigators, maps, weather applications).

Please see Federal Law No. 301-FZ of July 10, 2023, "On Amendments to the Federal Law 'On Protection of Competition'" for more information: http://publication.pravo.gov.ru/document/0001202307100016

Nadmitov, Ivanov & Partners Law Firm advises on antimonopoly law matters.