Section XVIII
GENERAL PRINCIPLES AND RULES OF COMPETITION
Article 74
General provisions
This Section determines the general principles and rules of competition ensuring detection and elimination of anti-competitive behaviour on the territories of the Member States and actions producing a negative impact on competition in transboundary markets on the territory of two or more Member States.
The provisions of this Section shall be applied to relations connected to the implementation of competition (antitrust) policy within the Member States and to relations with economic entities (market participants) of the Member States which produce or may produce an adverse effect on competition in transboundary markets on the territories of two or more Member States. The criteria of transboundary markets required for determining the jurisdiction of the Commission shall be determined by decision of the Supreme Council.
The Member States may determine in their legislation any further prohibitions, as well as additional requirements and restrictions with regard to the prohibitions set out in Articles 75 and 76 of this Treaty.
The Member States shall conduct agreed competition (antitrust) policy in relation to actions of economic entities (market participants) of third
countries, if such actions may negatively affect the competition in commodity markets of the Member States.
Nothing in this Section shall be construed so as to prevent any Member State from taking any action it deems necessary to protect the fundamental interests of national defence or national security.
The provisions of this Section shall be applied to the natural monopoly entities with account of the specific features provided for by this Treaty.
The provisions of this Section shall be implemented in accordance with Annex 19 to this Treaty.
Article 75
General Principles of Competition
The Member States shall apply their rules of competition (antitrust) legislation to economic entities (market participants) of the Member States in an equitable manner and to the equal extent irrespective of the legal form and place of registration of such economic entities (market participants) on equal terms.
The Member States shall, in particular, determine in their legislation prohibitions of:
1) agreements between state government authorities, local authorities and other agencies or organisations exercising their functions or agreements between them and economic entities (market participants), if such agreements result or can lead to any prevention, restriction or elimination of competition, except in cases provided for by this Treaty and|or other international treaties of the Member States;
2) provision of state or municipal preferences, except as provided by the legislation of the Member States, and with account of the specifications set out in this Treaty and|or other international treaties of the Member States.
The Member States shall take effective measures to prevent, detect and combat actions (omission) specified in sub-paragraph 1 of paragraph 2 of this Article.
The Member States shall, in accordance with their legislation, ensure efficient control over the economic concentration to the extent required for the protection and development of competition on the territory of each Member State.
Each Member State shall ensure availability of a state government authority in charge of the implementation and|or enforcement of competition (antitrust) policy, which implies, among other things, vesting such authority with the powers to monitor the compliance with the prohibition of anti-competitive practices and unfair competition and economic concentration, as well as to prevent and to detect violations of competition (antitrust) legislation, to take measures to stop these violations and prosecute such
violations (hereinafter “the authorised authority of the Member State”).
6. The Member States shall determine in their legislation penalties for economic entities (market participants) and public officials with regard to all anti-competitive behaviour, based on the principles of efficiency, proportionality, security, inevitability and certainty, and shall ensure control over their enforcement. The Member States recognise that in case of penalties, the highest penalty rates shall be set for violations representing the greatest threat to competition (anti-competitive agreements, abuse of dominance by economic entities (market participants) of the Member States).
Penalties calculated on the basis of the income generated by the violator in selling goods or on the cost of purchase of goods by the violator in the market where the violation occurred shall be preferred
The Member States shall, in accordance with their legislation, ensure permanent informational transparency of their current competition (antitrust) policy, including by posting information on activities of their authorised authorities in the media and on the Internet.
Authorised authorities of the Member States shall, in accordance with their state legislation and this Treaty, interact with each other by sending notices and requests for information, holding consultations, sending notifications on investigations (examination of cases) affecting the interests of another Member State, conducting investigations (examination of cases) by request of an authorised authority of any Member State and providing information on their results.
Article 76
General Rules of Competition
1. Any actions (omission) of dominant economic entities (market participants) that result or may result in prevention, restriction or elimination of competition and|or infringement of interests of other persons shall be prohibited, including the following actions (omission):
setting and maintaining monopolistically high or low prices of
goods;
withdrawal of goods from circulation resulting in an increase in the price of such goods;
forced imposition of any economically or technologically unjustified contract conditions to contractors that are unfavourable for the latter or not related to the subject matter of the agreement;
economically or technologically unjustified reduction or cessation of production of goods, if the goods are in demand or orders for their delivery have been placed and their production is feasible, as well as if such reduction or cessation of production of the goods is not explicitly provided for by this Treaty and|or other international treaties of the Member States;
economically or technologically unjustified refusal to enter or evasion from concluding agreements with individual buyers (customers) capable of manufacturing or supplying the relevant goods with account of the specifications set out in this Treaty and|or other international treaties of the Member States;
economically, technologically or otherwise unjustified setting different prices (tariffs) for the same products, thus creating discriminatory conditions, with account of the specifications set out in this Treaty and|or other international treaties of the Member States;
creating barriers to entry into the commodity market or exit from the commodity market for other economic entities (market participants).
2. Any unfair competition shall be prohibited, including:
dissemination of false, inaccurate or distorted information, which may inflict damage to an economic entity (market participant) or damage its business reputation;
misleading as to the nature, method and place of manufacture, consumer properties, quality and quantity of goods or their manufacturers;
incorrect comparison by an economic entity (market participant) of goods manufactured or sold by the entity with goods manufactured or sold by other economic entities (market participants).
3. Any agreements between economic entities (market participants) of the Member States shall be prohibited if these entities are competitors operating in the same product market and such agreements lead or may lead to:
setting or maintaining prices (tariffs), discounts, allowances (surcharges), extra charges;
increasing, decreasing or maintaining prices in tenders;
dividing the commodity market in the territorial principle, by the volume of sales or purchases of goods, by the range of products sold or composition of sellers or buyers (customers);
reduction in or cessation of the production of goods;
refusal to conclude agreements with certain sellers or buyers (customers).
4. “Vertical” agreements between economic entities (market participants) shall be prohibited, with the exception of “vertical” agreements
recognised as admissible in accordance with the admissibility criteria
determined by Annex 19 to this Treaty, if:
such agreements lead or may lead to setting a resale price of goods, except in the case where the seller sets to the buyer the maximum resale price of goods;
such agreements obligate the buyer not to sell goods of any economic entity (market participant) that is a competitor of the seller. This prohibition shall not apply to agreements implying organisation by the buyer
of the sale of goods under the trademark or other identifications of the seller or manufacturer.
5. Other agreements between economic entities (market participants) shall be prohibited, except for “vertical” agreements recognised as admissible in accordance with the admissibility criteria determined in Annex 19 to this Treaty, if it is determined that such agreements lead or may lead to any restriction of competition.
It shall not be allowed for natural persons, business and non-profit organisations to coordinate economic activities of economic entities (market participants) of the Member States, if such coordination leads or may lead to any of the consequences set out in paragraphs 3 and 4 of this Article that may not be recognised as admissible in accordance with the admissibility criteria determined in Annex 19 to this Treaty. The Member States may determine in their legislation a ban on coordination of economic activities if such coordination leads or may lead to the consequences specified in paragraph 5 of this Article that may not be recognised as admissible in accordance with the admissibility criteria determined by Annex 19 to this Treaty.
All violations of the general rules of competition determined in this Section by economic entities (market participants) of the Member States, as well as by natural persons and non-profit organisations of the Member States not carrying out any business activity, if such violations have or may have an adverse effect on competition in transboundary markets on the territories of two or more Member States, with the exception of financial markets, shall be stopped by the Commission in the procedure provided for by Annex 19 to this Treaty.
Article 77
State Price Regulation
Procedures for the introduction of state price regulation and contesting
respective introduction decisions made by the Member States shall be
specified by Annex 19 to this Treaty.
Section XIX
NATURAL MONOPOLIES
Article 78
Spheres and Natural Monopoly Entities
When regulating natural monopolies, the Member States shall be guided by the rules and regulations provided for by Annex 20 to this Treaty.
The provisions of this Section shall be applied to relations with natural monopoly entities, consumers, executive and local authorities of the Member States in the spheres of natural monopolies affecting the trade between the Member States and listed in Annex 1 to Annex 20 to this Treaty.
Legal relations in specific spheres of natural monopolies shall be in accordance with this Section, with account of the specifications provided for by Sections XX and XXI of this Treaty.
In the Member States, the spheres of natural monopolies shall also include the spheres of natural monopolies specified in Annex 2 to Annex 20 to this Treaty.
Requirements of the legislation of the Member States shall be applied to the spheres of natural monopolies specified in Annex 2 to Annex 20 to this Treaty.
A list of services provided by natural monopoly entities included in the spheres of natural monopolies shall be determined by the legislation of the Member States.
The Member States shall seek to harmonise all spheres of natural monopolies specified in Annexes 1 and 2 to Annex 20 to this Treaty through their reduction and possible identification of a transitional period in Sections XX and XXI of this Treaty.
Natural monopolies in the Member States may be expanded:
in accordance with the legislation of the Member States, if a Member State intends to include in the sphere of natural monopolies a sphere rated as a natural monopoly in another Member State and specified in Annex 1 or 2 to Annex 20 to this Treaty;
by decision of the Commission, if a Member State intends to include in the sphere of natural monopolies a sphere of natural monopolies not specified in Annex 1 or 2 to Annex 20 to this Treaty, following a respective request from the Member State to the Commission.
This Section shall not apply to any relations governed by effective bilateral international treaties between the Member States. Newly concluded bilateral international treaties between the Member States may not conflict with this Section.
The provisions of Section XVIII of this Treaty shall be applied to natural monopoly entities with account of the specific features stipulated in this Section.