About Ways To Improve Ukrainian Antimonopoly Committee’s Work On Fuel Market
Competition safeguarding policies pursued by any state are criticized probably more often than any other form of public intervention by the government in private affairs. Prominent economists of our times, from Friedrich Hayek to Alan Greenspan, call the world of antitrust regulations as «naive,» «unrealistic,» «ignorant» and «irrational», while Milton Friedman believes that competition laws «do far more harm than good,» and » it would be better if we got rid of it…»
But this is starkly in conflict with the words of English essayist Joseph Thomas Dunning, who was sure that if profit is sufficient, capital becomes bold: there is no crime it wouldn’t risk for 300% profit, even under the threat of the gallows.
The current competition law in Ukraine provides the Antimonopoly Committee (AMC) with a wide range of legal and protective powers. Unlike their counterparts in the CIS, this antitrust authority can suppress not only the illegal actions of businesses, but also those of the executive powers, and evaluate norms and laws in terms of their compliance with antimonopoly legislation. Thus, the AMC is a powerful tool for achieving the objectives of competition policy and the ineffectiveness of the implementation of the policy is acknowledged by the law as a factor that threatens to the national security of Ukraine.
Despite this, Ukraine’s oil market is seeing numerous cases of:
- establishing and maintaining excessive (monopoly) or understated (or extortionate) prices of petrol and diesel fuel;
- the withdrawal of goods from circulation and a groundless reduction in the production of commodities that are in demand;
- creating barriers to the entry of competitors to the market;
- disseminating false, inaccurate or distorted information that can cause damage or harm;
- confusing the consumer about the place of production, the characteristics, quality and quantities of commodities, and providing incorrect comparisons of produced and/or sold goods.
Moreover, the state itself often unnecessarily impedes the activities of market participants, in particular by:
- deliberately restricting their right to sell oil products;
- giving instructions on priority supplies of commodities to a certain group of buyers (including agricultural producers);
- attempting to impose restrictions on the choice of the manufacturer by consumers («buy Ukrainian»);
- unreasonably restricting access to bidding at auctions and tenders, creating preferential bidding conditions for certain market players.
Such interventions are certainly not conducive to achieving the objectives of competition policy declared by the state. Nowadays, having uncovered collusion or proving the fact that companies set monopoly prices, the AMC takes appropriate measures, ensuring a significant share of budget receipts. In particular, last year alone those who violated laws on economic competition paid UAH 41 million in fines, which was 1.5 times up on 2010. At the same time, the economic effect achieved by the termination by AMC agencies of violations of the law was estimated at over UAH 489 million, which was 4.2 times up on the previous year.
You can read full article in journal «Terminal: Oil Review» №9 (595) 5 Mar 2012
