Antitrust Practices: Clearances, Unfair Competition, and Enforcement in Belarus

1) What types of unfair competition are prohibited in your jurisdiction?

In Belarus, an open list of types of unfair competition has been established. These include, among other things, disparaging competitors through false information about their goods, misleading consumers, making improper comparisons with competitors, unlawfully using another’s IP, and taking actions creating confusion with a competitor’s products.

For conduct to be recognized as unfair competition, the following four conditions must be met:

1. the existence of competitive relations between the parties;
2. the competitor’s intention to obtain a benefit from its actions;
3. inconsistency of such actions with antitrust legislation or with the principles of fair business practice;
4. causing losses or damage to business reputation, or the potential thereof.

2) What types of bid rigging exist, and how are they classified?

In Belarus, any actions that result in, or may result in, the prevention, restriction or elimination of competition in the course of procurement procedures are prohibited.

Examples of such actions include:

1. coordination by the organiser and/or the contracting authority of the activities of a participant in the procurement of goods;
2. conclusion of agreements between the organiser and/or the contracting authority and/or a participant in the procurement;
3. providing a participant with access to information not permitted under legislation;
4. creating preferential conditions for a participant where not authorized by legislation;
5. participation of the organiser and/or the contracting authority, or their employees, as participants in procurements conducted by the organiser and/or the contracting authority.

Where violations are established in the course of procurement, both the contracts concluded and the procurement processes themselves may be declared invalid, including upon the claim of the Ministry of Antimonopoly Regulation and Trade of the Republic of Belarus (Antitrust authority).

3) How do antitrust authorities detect and investigate cartels and anti-competitive agreements?

In Belarus, cartels, vertical agreements, and other agreements that result in adverse effects for economic entities are prohibited. Vertical agreements are permitted in two cases: (1) in the case of a franchising agreement; (2) where the market share of each participant in the vertical agreement does not exceed 25%.

For the recognition of a cartel, the existence of merely two elements is sufficient:

• the economic entities are competitors;
• one of the consequences listed in Article 20 of the Law “On Counteraction to Monopolistic Activity and the Development of Competition” has occurred (for example, market division by territory, products, clients, prices, etc.).

The Antitrust authority establishes the existence of anticompetitive agreements based on documents and information received from state authority (for instance, the Department of Financial Investigations), complaints alleging violations, and information from mass media sources.

A special commission has been established within the Antitrust authority to determine the existence (or absence) of violations of antitrust legislation. Following its deliberations, the commission is empowered to adopt decisions, for example, on the establishment of a violation (or the absence thereof) of antimonopoly legislation, or on the existence (or absence) of grounds for issuing a warning.

4) What measures can companies take to mitigate antitrust risks?

To mitigate antitrust risks, it is recommended to conduct compliance reviews of executed contracts, approved internal legal acts, and publicly released content. 

Examples of such compliance measures include: 

1. Analysis of contractual relations between the parties.
2. Assessment of market impact of the contract.
3. Review of content for accuracy, references to competitors, and the presence of similar products on the market.
4. Procedures for the creation of IP objects.
5. Arrangements for the protection of trade secrets.
6. Calculation of market share, determination of the relevant product market and its geographical scope.
7. Analysis of antitrust legislation in cases of reorganisation, establishment of holdings and associations, or the establishment of subsidiaries.
8. Examination of the presence of groups of entities in the market.

Where an economic entity intends to conclude a contract that may potentially affect competition, it has the right to submit the draft contract to the Antitrust authority for confirmation of its compliance with antitrust legislation.

5) What are the specific rules governing undertakings with a dominant market position?

The legislation of Belarus contains a direct prohibition on abuse of a dominant position, including a prohibition on:

• creating obstacles to market entry or exit;
• establishing or maintaining a monopolistically high or monopolistically low price (tariff);
• unjustified reduction or cessation of production when there is demand for the product or orders have been placed and profitable production is possible;
• unjustified setting of different prices (tariffs) for the same product;
• concluding agreements with suppliers or consumers that result in restricting or controlling production, controlling product distribution channels, or limiting the product’s market;
• creating other discriminatory conditions, etc.

In addition, the implementation of certain actions constituting economic concentration (for example, reorganisation or the acquisition of 25 per cent or more of the voting shares of business entities) requires the prior consent of the Antitrust authority.

6) What powers do antitrust authorities have when conducting inspections?

In the course of inspections, the Antitrust authority may request the necessary documents and information, as well as written and oral explanations. The general period for consideration of an application concerning a violation is 3 months from the date of its submission, which may be extended up to 9 months.

Based on the results of its review, the Antitrust authority may:

• issue warnings on the necessity of eliminating the causes and/or conditions that contributed to the violation of antimonopoly legislation, and on the adoption of measures aimed at eliminating the consequences of such violation;
• issue binding orders, for example, to cease unfair competition;
• apply to the court with claims or applications for declaring contracts invalid in whole or in part, for amendment or termination of a contract, or for declaring procurement procedures invalid.

Authors: Anton Mazol, Polina Sachava, Kristina Panchenko