Fifth Antitrust Package: Amendments and Updates

13 July 2023

Federal Law No. 301-FZ “On Amendments to the Federal Law “On Protection of Competition”” (the “Law”) was signed by the President of the Russian Federation on 10 July 2023 and will enter into force on 1 September 2023. As follows from the explanation note, the Law provides a set of norms aimed to improve antitrust regulation in the digital economic development. The main amendments of the fifth antitrust package you can find below.

New definitions of “network effect” and “digital platform” have been approved

The antitrust authority has already stated the need to improve the legislation considering the fast digitalization and the risk of digital monopolies in 2018¹. Thus, the new Law includes key concepts for prevention of digital monopolies:

“Digital platform”	a program (set of programs) for computers on the Internet, which enables transactions between sellers and buyers of certain goods
“Network effect”	a property of a commodity market(s) in which the use value of a digital platform changes depending on changes in the number of such sellers and buyers

The new rules are aimed at regulating the activities of marketplaces and aggregators. When analyzing the condition of competition in the product market where transactions are conducted through digital platforms, the antitrust authority shall establish the existence of network effects and assess the possibility of the owner of such a platform to influence on the general conditions of circulation of goods in the market, remove competitors or make it difficult for them to access the market².

Prohibition of monopolistic activities in digital markets

The Fifth Antitrust Package introduces a new prohibition for owners of digital platforms to carry out actions that result or may result in prevention, restriction, elimination of competition and (or) infringement of the interests of others. These rules apply to owners of digital platforms, provided that following conditions are met simultaneously³:

the presence of a network effect in the product market;
the share of transactions between sellers and buyers through a digital platform is higher than 35% of the total volume of transactions in the relevant product market;
the revenue of such business entity for the last calendar year exceeds 2 billion rubles.

“Currently, among such digital platforms definitely are Avito, Cian, Yandex.Taxi, as well as Google and Apple as owners of app stores. In the future, they may include other companies”, – informs FAS Russia⁴.

Regulation of the procedure for conducting an expert analysis

The Law provides expansion of the institution of expert examination and introduction of possibility of its appointment and conduct (at the initiative of an antitrust authority or persons participating in a case) within the framework of:

consideration of applications for consent to a transaction or other action subject to state control;
consideration of a case on violation of antitrust legislation;
control over the execution of orders issued as a result of consideration of applications for approval of economic concentration transactions.

The expert opinion shall be considered by the antitrust authority when making a decision in the abovementioned cases.

Criteria for the approval of economic concentration transactions

The Fifth Antitrust Package introduces a new mandatory condition under which companies must obtain the consent of the antitrust authority in order to enter into a transaction:

BEFORE	AFTER
the total value of assets of the buyer (shares, stocks, property, rights) and the object of economic concentration – RUB 7 billion	the total value of assets of the buyer (shares, stocks, property, rights) and the object of economic concentration – RUB 7 billion
or	or
total proceeds from the sale of goods of the buyer (shares, stocks, property, rights) and the object of economic concentration – RUB 10 billion	total proceeds from the sale of goods of the buyer (shares, stocks, property, rights) and the object of economic concentration – RUB 10 billion
and	and
the value of assets of the object of economic concentration and its group of entities – RUB 800 million	the value of assets of the object of economic concentration and its group of entities – RUB 800 million
	or
	the deal price – RUB 7 billion⁵

Thus, the Yandex.Taxi/Vezet transaction could have been blocked to protect competition and interests of citizens due to exceeding the threshold of agreement over RUB 7 billion by FAS Russia in 2021 if this Law had been adopted – the FAS of Russia noted⁶.

Conclusion on circumstances

If FAS Russia comes to a preliminary conclusion that the deal or other action will or may lead to a restriction of competition, as a result of consideration of an application for consent to a deal or other action subject to state control, the antitrust authority shall before taking a decision on the results of the consideration of the application, send to the applicant and other persons participating in the deal or other action declared in the application a conclusion on the circumstances of the application for consent to carry out the transaction or other action.

The conclusion on the circumstances shall contain:

factual circumstances determined by FAS Russia based on the results of the examination of the petition, including those determined in the process of FAS Russia's analysis of the condition of competition, as well as a description of the evidence supporting FAS Russia's preliminary conclusions that the transaction or other action declared in the petition will or may result in a restriction of competition;
suggested conditions that may be imposed by FAS Russia on the applicant and other parties involved in the transaction or other action declared in the application to ensure competition.