Interview with Olha Pishchanska, Chair, Antimonopoly Committee of Ukraine

Olha Pishchanska was appointed Chair of the Antimonopoly Committee of Ukraine (AMCU), in July 2020, having previously been the First Deputy Chair of the AMCU since September 2019. Previously, she was the Director of Zakupivelni Rishennia LLC, and was also the Commercial Director of STEM Engineering LLC. She graduated from Kryvyi Rih Technical University in 1997 with a degree in Industrial and Civil Engineering, and received a Master’s degree in business economics from Kyiv National Economic University in 2001 and an MBA from the Edinburgh Business School (Heriot-Watt University). She was interviewed for the Antitrust Magazine Online by John Bodrug, with Natalia Nagach serving as interpreter, on March 30, 2023.

ANTITRUST MAGAZINE ONLINE: Thank you for taking the time to meet with us today.

We would like to talk about the structure, experience, and challenges of developing and enforcing competition law in the Ukraine. But I feel that I have to begin by acknowledging the ongoing war in the Ukraine and terrible conditions that the Ukrainian people are experiencing and express my hope that the war will end soon and that Ukraine will rebuild quickly.

OLHA PISHCHANSKA: I am also grateful to you for inviting me for an interview, for your interest in Ukraine and in our institution, the Antimonopoly Committee. We are also grateful to your country for its comprehensive support. Ukraine is fighting with all its might and will definitely win this unjust war. I fully share your hopes, as we have all the capabilities and resources to become a valuable player in the international arena after the recovery.

ANTITRUST MAGAZINE ONLINE: Perhaps you could start by summarizing the role and structure of the Antimonopoly Committee of Ukraine.

OLHA PISHCHANSKA: The Antimonopoly Committee of Ukraine was established right after Ukraine’s independence. Ukrainian competition law was developed following the example of European legislation, mostly borrowing norms from German competition law. And for some time, it was really effective. However, over the decades, the economy, technology, and markets have gone through several periods of transformation, while Ukrainian competition law, to be honest, has changed only slightly. That is why we have now started to reform it.

Currently, the AMCU’s structure is as follows: The core of the body is the AMCU’s experts, who are directly involved in investigations and research. They bear the brunt of technical, bureaucratic and analytical work. The second half of the team is made up of the state commissioners of the AMCU, each of whom has equal authority and is responsible for a specific investigation together with a group of experts. The Chair of the AMCU is also a state commissioner.

The AMCU makes its decisions collectively, by voting of the state commissioners, each of whom is fully independent. They have equal rights and powers. During the voting process, the Chair of the AMCU performs only administrative functions, and her vote is considered on an equal level with the votes of her colleagues.

The ACMU has six territorial offices, each of which is responsible for certain regions of Ukraine. Territorial offices are separate legal entities, but they are subordinated to the Antimonopoly Committee. Previously, there were more than two dozen offices in each major city. But thanks to digitalization, there is no longer a need for such a large number of offices, and their number has been reduced to six. As a result, the level of bureaucracy has decreased and the efficiency of the branches has significantly increased.

ANTITRUST MAGAZINE ONLINE: I was surprised to see the scope of jurisdiction of the AMCU that extends not only to competition matters, plus misleading advertising, which may not be surprising, but also state aid and the public procurement field. I can imagine it would be challenging to deal with that broad a scope of responsibilities.

OLHA PISHCHANSKA: Yes, this is indeed a challenge for the Antimonopoly Committee of Ukraine. But we are managing well, constantly analyzing the entire process and improving it as much as possible. For example, we have recently reformed the public procurement appeal body. Now we have a separate team of commissioners who will deal exclusively with this area. The state commissioners previously involved in reviewing procurement complaints will focus on the AMCU’s cases. This is a very important step, because before the war, the AMCU received thousands of complaints every year. For example, in 2021, there were about 14 thousand of them.

Similarly, the institution of state aid is a relatively new tool of the AMCU and a new approach to controlling the use of public funds in Ukraine. Over the past two years, we have made a real breakthrough in understanding and compliance with this legislation by aid providers. But it was not easy. This process can probably be compared to the five stages of acceptance of the inevitable in psychology. We went through them all. Because providers are used to using public funds at their own discretion, without a detailed calculation of the consequences. But we have to be sure that all public resources are spent without harming competition.

Our foreign partners also help us to cope with this workload and improve efficiency at the same time. For example, the EU SESAR Project helps us with state aid. We are also actively cooperating with the U.S. Federal Trade Commission and the European Twinning Program to improve competition law and share experience.

In general, we are actively discussing how the AMCU could prioritize its tasks and cases, how it could improve its structure. This is not to say that some of our functions are not needed. On the contrary, all of them are necessary to protect competition and develop markets in Ukraine.

We are looking for ways to fulfil our obligations efficiently, given the always limited resources, both human and financial. However, our main function is to support and control fair competition in the markets. This is what we would like to focus on more.

Priorities are one of the topics we are currently considering and striving to improve as part of the antitrust law reform. It involves three stages, and we are currently only at the first stage. At the same time, we hope to actively cooperate with the FTC/USAID project throughout the reform. This will allow us to use the best practical experience of American experts. It has already been tested by time, considers many nuances, and it helps us a lot.

ANTITRUST MAGAZINE ONLINE: I also found it surprising that the AMCU has an obligation to investigate and report on every complaint that it receives, which I can imagine makes it harder to prioritize, although I suppose that makes it a more open and public process.

OLHA PISHCHANSKA: Yes, you are right. In the current circumstances, it is difficult but necessary. We are open to all undertakings and citizens of Ukraine, and we respond to every request and application.

Ukrainian courts do not have the authority to independently establish a violation of competition rules at the request of undertakings. This is possible only after the AMCU has established, for example, the fact of abuse of a monopoly position. Only after that can damages be claimed in court.

For a general understanding of our workload: as of March 2023, 1,433 cases are under consideration by the AMCU’s bodies.

As I have already mentioned, our competition authority does have limited resources, which is why we are now studying the capabilities and experience of our colleagues in prioritizing our work.

ANTITRUST MAGAZINE ONLINE: On top of everything else, I see that you are busy with market studies, and I noted that the 2013 United Nations’ Peer Review of Ukraine’s Competition Law and Policy said that, in 2012, the AMCU reviewed over 2000 regulations, decisions, and draft decisions of public authorities. That seems to be another very busy area for the AMCU.

OLHA PISHCHANSKA: Since then, the situation has changed a bit. The number of regulations has decreased, but they have become more complex. For example, in 2021, we reviewed and processed 1,243 draft legislative and other regulatory acts, draft decisions of local governments, etc. This is a heavy workload for our experts. However, we actively involve our territorial offices in this work, so despite all the difficulties, the AMCU properly fulfills its tasks.

As for research, given the significant labour intensity of this process, we strive to focus our resources on those that have a significant impact on the economy and pose risks to competition.

ANTITRUST MAGAZINE ONLINE: That fits well into talking a little bit about the historical context. Ukraine is still working to emerge from the Soviet era in moving from government ownership to privatization, but it still has very concentrated industries. Are there still some factors that are making it challenging to make that transition to a more modern competition law regime?

OLHA PISHCHANSKA: Thank you for this question. Given today’s realities, it is now one of the most important for the competition authority of Ukraine. I would personally consider it also in a historical context, for example, where we are talking about highly concentrated markets. The difficult question we are looking for an answer to is how did we get to the point where large companies that once belonged to the state became the property of five or six private owners? And how did it end up, why was it allowed that these five or six owners gained great market power? Another typical situation is that there were a certain number of independent undertakings operating in the market, but over a certain period of time this market became highly concentrated.

There are many such examples in Ukraine’s economic history. We analyze them to prevent these situations from happening again, because we see that these risks have been exacerbated by the war. Some markets suffered heavy losses due to rocket attacks, Russian occupation, etc. We are now working to understand how we can increase competition in these markets in the future. By the way, in this context, we are currently studying the experience of our colleagues from the United Kingdom in applying the market investigation tool.

To summarize, I would say that the market power of some large companies is still there, but we also do not rule out that it will become even greater in some markets due to the war.

ANTITRUST MAGAZINE ONLINE: I understand that initially the AMCU’s focus was on the Law on the Protection of Economic Competition, focusing on monopolies, abuse of dominance, and excessive pricing, and it sounds like that might continue to be a focus in light of the factors you just described.

OLHA PISHCHANSKA: Even before the war, we paid a lot of attention to markets that showed signs of monopolization. Our task now is to prevent these processes from intensifying, to reduce the negative impact of the dominant position of undertakings and to anticipate possible problem situations.

We also react strongly to signs of cartels. After all, they can also have a negative impact on markets, in particular, making them, perhaps not monopolized, but more concentrated.

ANTITRUST MAGAZINE ONLINE: I presume that you will also be emphasizing cartel laws and, in particular, focus on bid-rigging laws in anticipation of rebuilding and trying to ensure that businesses or persons who participate in those processes are well aware of the laws in that area.

OLHA PISHCHANSKA: During the war, the public sector has become one of the largest players in the economy, and the volume of public procurement is now very high. Consequently, violations in this area can dramatically change markets and destroy the already fragile economic balance. Therefore, exposing bid rigging is one of our most important tasks. We have extensive experience in this area and many of our decisions in such cases have been upheld by Ukrainian courts.

At the same time, we are working with our international colleagues to improve our tools for detecting violations in this area. We are looking for cooperation with vendors that make the relevant software, discussing new tools that could be used in procurement collusion investigations. This is a topical issue, as undertakings that violate public procurement legislation are becoming smarter and more inventive in their approaches and ways to conceal violations and avoid responsibility. That is why we need to be one step ahead of them.

ANTITRUST MAGAZINE ONLINE: You mentioned that state-owned enterprises still represent a large part of the economy. Does the AMCU have authority to oversee any anticompetitive conduct by State-owned enterprises, or is that outside of your scope?

OLHA PISHCHANSKA: Yes, of course, we have such authority. When making decisions in an investigation, we do not consider whether the company is owned by a private individual or the state. They are equal for us. Therefore, if we find signs of a violation, we analyse the situation equally with respect to all defendants, investigate the case and make a decision. In addition to a fine, we can also impose obligations on the undertaking to cease the violation or eliminate the negative consequences. At the same time, the imposition of certain obligations should not interfere with the freedom of economic activity.

ANTITRUST MAGAZINE ONLINE: Conversely, on the private sector side, I think you mentioned difficulties in figuring out who owns what. I read about something called an Anti-Oligarch Bill that is requiring registration of ownership. Is that helping, or do you expect that to help?

OLHA PISHCHANSKA: The purpose of this new law was to reduce the influence of the so-called oligarchs on the markets, the economy of Ukraine, and our social life. After all, the purpose of such influence is to obtain excessive profits. If we are talking about the AMCU, our main function to counteract this has remained unchanged—to control competition in the markets to prevent abuse of monopoly power. Based on our specialized legislation, we already have certain tools to counteract these practices.

At the same time, such cases often violate not only the legislation on protection of economic competition, but also other laws. Therefore, all authorities must work systematically to counter these violations.

ANTITRUST MAGAZINE ONLINE: Do you think that you have had enough enforcement and actual penalties to be establishing a competition compliance culture in Ukraine, or is that continuing to be a challenge? I know from earlier days in Canada when we adopted a more meaningful competition law in the 1980s, it took some time for business people to take it seriously. Is the Ukraine competition law evolving to the point where businesses in Ukraine feel there is a meaningful law with teeth to it?

OLHA PISHCHANSKA: Now all our actions are aimed at achieving the ideal situation when the vast majority of companies will comply with laws and regulations. For example, as I have already mentioned, we have launched a reform of the antimonopoly legislation, which should strengthen the AMCU’s ability to detect violations and minimize the opportunities for violators to avoid liability. Also, certain contradictions in the legislation need to be resolved, so compliance with the rules is not perfect in all areas.

But lately, we have noticed that some undertakings have started analyzing our practice to calculate the consequences of their actions, what the AMCU’s decision may be regarding certain actions, what the fine for violations may be, etc.

In my opinion, this is because in recent years we have made many decisions in quite complex cases against really large and strong market players, imposing significant liability measures, in particular, in cases of bid rigging. Many of our decisions are upheld by the courts, so large undertakings are increasingly “looking back” at the AMCU and weighing their every move. This is exactly as it should be in the civilized world.

In other words, now undertakings feel the consequences of our decisions physically and take the Antimonopoly Committee and its position into account. But this is only a starting point for us. We urgently need to develop and implement new investigation tools. There is also a significant need to improve the knowledge of our experts. We are on the right track, but this is just the beginning.

ANTITRUST MAGAZINE ONLINE: I earlier noted the high volume of cases you’ve dealt with, but I have also noted there were some very big ones as well. Do you want to highlight one or two of the most significant cases? I noticed there are some in the cigarette industry and in the gas sector.

OLHA PISHCHANSKA: Yes, I would probably include tobacco cases in the list of the most difficult ones. First, we spent a long time analysing the situation in these markets. And then we started several cases. We are most proud of the case in which the decision was delivered in 2016. It concerned abuse of dominance by Tedis, a distributor in the cigarette market. The company paid over 300 million Ukrainian hryvnia in fines to the AMCU, a huge sum at the time. But the AMCU’s work did not stop there, because we monitored the implementation of our decision and found that it was not fully implemented. For this, Tedis was brought to justice again. We are now defending this case in the courts. There was another case that concerned all manufacturers and distributors associated with Tedis and the anticompetitive concerted actions they jointly committed. Unfortunately, our decision here was not upheld by the court. The main conclusion of the courts was that it was impossible to use another decision as evidence, and this issue had not been raised in court before. We have drawn conclusions for the future on how to prove a violation in a similar situation.

ANTITRUST MAGAZINE ONLINE: In the area of cartels, I have read that parallel conduct may be presumed to be an agreement in some contexts. Does that make it difficult for Ukrainian businesses to know where the line is between an agreement which is an offense and parallel conduct which is not?

OLHA PISHCHANSKA: If companies are planning to conduct any concerted actions, they have a statutory opportunity to obtain the AMCU’s position on their plans in advance. They can submit an application to us and set out all the details of future cooperation. And we will inform them whether they can do so or not.

Determining the line between the agreement and merely parallel behaviour is a key topic of our investigations. The main thing here is to carry out a thorough analysis and clearly establish the consequences of these actions, the extent of each company’s participation, and whether their behaviour was truly anticompetitive. If we see that their actions limit the opportunities of other market participants who are not involved in these events, then, of course, the necessary decisions will be made.

ANTITRUST MAGAZINE ONLINE: Is that a frequent exercise? Does the AMCU frequently issue authorizations for concerted practices, or is that a relatively rare occurrence?

OLHA PISHCHANSKA: I would say that these are very ad hoc situations, but they do not happen often. By the way, when we receive an application for concerted actions, we also ask for the opinion of other market participants on how these actions will affect their interests and economic activities. Of course, we take this information into account.

ANTITRUST MAGAZINE ONLINE: I noted that the merger notification regime was suspended in February of 2022 and reinstated in June of 2022. I also understand that there have been issues about whether the merger notification thresholds were too low, especially in capturing foreign-based transactions. Could you comment on the current status of and the thresholds in the merger regime?

OLHA PISHCHANSKA: The suspension of the review of merger notifications was solely for security reasons at the beginning of the large-scale Russian invasion. At that time, all confidential information about undertakings was stored directly at the Antimonopoly Committee of Ukraine in Kyiv. We ensured the complete safety of these documents, but for some time restrictive security measures were in place to access the central office premises.

However, we had to ensure the rights of the parties to the merger and consider their notifications. To this end, we decided to extend the deadlines for reviewing such notifications and granted the right to merger participants to submit them in a simplified form. I would like to emphasize that we did not change the thresholds and are now complying with the current legislation.

We followed the simplified procedure to make sure that the merger does not take place without prior approval of the Antimonopoly Committee of Ukraine. Now the situation has become safer, so we have continued our in-depth and comprehensive analysis of the notifications.

As of today, all merger notifications received during this period and renewed by the applicants have been responded to. Only a few notifications were withdrawn by the companies themselves. By the way, we also provided the parties to the merger with the opportunity to amend or suspend the notifications submitted during this period.

ANTITRUST MAGAZINE ONLINE: I noted that in the context of mergers the Cabinet of Ministers has the authority to authorize mergers that might otherwise be a problem under the competition law. Is that a power that is used frequently or rarely or at all?

OLHA PISHCHANSKA: The Cabinet of Ministers of Ukraine does have this authority. If the Antimonopoly Committee of Ukraine prohibits a merger, the government can indeed authorize it if the positive effect on the public interest of the merger outweighs the negative effects on competition. But we have not yet had such a situation.

ANTITRUST MAGAZINE ONLINE: Let’s switch to the international context. You talked about cooperation with the U.S. FTC, but apart from that, when you are conducting general enforcement activities, do you have regular cooperation and information sharing with other authorities like the EU or the U.S. agencies?

OLHA PISHCHANSKA: I would say that our contacts with foreign partners have become an integral part of our work routine. We constantly exchange with our foreign colleagues the experience of law enforcement and working with various investigation tools, etc. Regarding the exchange of information, I would like to emphasize that we exchange only non-confidential information, because the exchange of confidential information is possible only if there is an agreement between the two countries. By the way, we are planning to sign a Memorandum of Regional Cooperation with nine competition authorities from Central and Eastern Europe soon. This is a large joint platform through which we plan to implement important projects of various levels, including personnel development and exchange of experience and information.

As I have already mentioned, over the past three years we have been actively and quite fruitfully cooperating with the FTC/USAID program and the European Union Twinning project. As of now, these contacts have moved to the expert level. We are in contact with our European colleagues almost daily, in particular, on state aid issues. After all, Ukraine does not yet have all the necessary regulations for the full-fledged work of this institution, and if necessary, we use European legislation. Our colleagues from the EU also provide us with consultations and advice on the implementation of European rules.

We also conducted a study of the electricity market in Ukraine together with the OECD before the war started. As you can guess, the war has made its own adjustments to it, so the study can be divided into two parts—before and after February 24. The report is currently being finalized, and we hope to present it in June 2023.

ANTITRUST MAGAZINE ONLINE: We’ve talked a lot about the development of and the goals and aspirations for the competition law, but a law is implemented by people, and the war has obviously created a very difficult situation for the people at the AMCU. I wonder if you could tell us a little bit about how some of the people are doing and how the institution is faring during this very difficult time.

OLHA PISHCHANSKA: We are working, we did not stop working for a day during the large-scale invasion. Of course, at the beginning of the war, people’s emotional state was difficult, especially for those who have children, whose loved ones were under occupation or at the front. But we quickly regained our team spirit and focused on our work, on the functions of the body. This helped to restore the previous pace of work, and in some places to speed up certain processes. However, I must admit that we are currently experiencing a certain shortage of staff at the Antimonopoly Committee. Unfortunately, there are too few of us. We lack staff, we lack experts.

The implementation of the competition reform will make possible, among other things, to provide specialists with competitive salaries and modern technical support. So, I hope we will be able to strengthen our team in the future.

I would like to emphasize that I am already extremely proud of our people. Despite all the challenges, they have been working hard, delivering high-quality, efficient results, and are ready to learn, improve and adopt new experiences. And of course, we need the support of international experts.

By the way, I would like to thank European countries and colleagues from other countries for their humanitarian initiatives. At the beginning of the war, many of our employees had to go abroad for security reasons. Thanks to the assistance of our foreign partners, these experts were able to combine their temporary stay there with training and exchange of experience. They returned to Ukraine with a wealth of new knowledge and are now implementing this experience at the AMCU.

ANTITRUST MAGAZINE ONLINE: Is there anything that you would like to address that we haven’t covered today?

OLHA PISHCHANSKA: First of all, I would like to say that I am extremely grateful to all Ukrainians, and in particular to business representatives, for their resilience, perseverance, and belief in victory. I would also like to express special gratitude to all our international partners for their support of Ukraine. This makes us feel that we are not fighting this war alone, but together with you.

In particular, with regard to our competition authority, we are all fully aware of the enormous responsibility that the AMCU will have during the post-war recovery period. After all, one of our main tasks will be not just to create acceptable conditions for undertakings. Our main goal, the highest goal, is to create a completely new, modern and competitive economic model. Not to rebuild the one of the post-Soviet era with the oligarchs in power. We will have a chance and we must use it to create an economy where fair competition will develop, where undertakings will have many opportunities for development. We need an economy that will work for the benefit of the entire society, because after the war, Ukraine will face a difficult and important period of restoring human potential.

No other country of our time has faced such a tragedy and losses as Ukraine is experiencing now. We understand that cooperation in such conditions is a new experience not only for us, but for the whole world. An experience that I hope will never be needed again. But we support each other, we fight together, and together we will win.