The State Duma of the Russian Federation approved a bill1 (Bill) providing amendments to the legislation on the protection of competition in the first reading.
If the Bill is adopted, the criteria for recognizing companies as dominant in the market will be changed. In particular, it is proposed to increase the minimum amount of annual revenue to recognize the dominant position of the entity in the market to 800 million rubles. Similar amendments are provided to article 28 of the Law on Protection of Competition: the necessity of obtaining the FAS's prior consent to the transaction will be required if the total value of the assets of the object of economic concentration and its group exceeds 800 million rubles.
Nowadays the company cannot be recognized as dominant in the market until its annual revenue exceeds 400 million rubles, while the prior FAS consent to transactions shall be obtained when the total value of assets of the entities exceeds 400 million rubles.
These amendments are primarily aimed at unifying the business level determination based on its income criteria, since the acts of the Government of the Russian Federation2 set the limit for small enterprises in the amount of 800 million rubles. Moreover, according to the FAS Russia3, in 2018-2020, about 15% of applications were submitted for transactions with the total amount of assets less than 800 million rubles. Thus, these novelties will also cut down on the workload of the antimonopoly authority.
The adoption of this Bill will optimize the antimonopoly control, as well as reduce the bureaucracy formalities for the business, hence, companies will have more economic freedom for their activities in the market.
1 Bill No. 9719-8 "On Amendments to the Federal Law "On Protection of Competition" and Article 1 of the Federal Law "On the Fundamentals of State Regulation of Trade Activities in the Russian Federation".
2 Resolution of the Government of the Russian Federation No. 265 dated April 4, 2016 "On the Marginal values of revenue received from entrepreneurial activity for each category of small and medium-sized businesses".
3 Explanatory note to the Bill No. 9719-8 "On Amendments to the Federal Law "On Protection of Competition" and Article 1 of the Federal Law "On the Fundamentals of State Regulation of Trade Activities in the Russian Federation".