Russia: Increased focus on online players and other proposed legislative changes

The Russian Federal Antimonopoly Service (‘FAS’) is pursuing further amendments to the Russian Competition Act (Federal Law No. 135-FZ ‘On Protection of Competition’) (known as the Fifth Antimonopoly Package).

The draft amendments proposed by FAS have been in discussion between FAS and the Russian government that are still ongoing. FAS aims to address issues arising due to the increased significance of internet-related business. Provisions will be introduced into the Russian Competition Act to allow FAS to better assess and classify the activities of online players serving as aggregators (such as Uber, Facebook, booking.com, etc.), especially when determining a dominant market position. A number of restrictions on market behaviour apply to market-dominant enterprises, and their infringement can result in turnover-related fines.

The draft amendments also provide for extended timeframes to review merger control filings as well as more flexibility for FAS to impose certain conditions or requirements in connection with merger clearance. FAS’s efforts in respect of the latter were apparently triggered by the Bayer/Monsanto case in which FAS imposed certain conditions – this rarely happens in practice – but FAS obviously felt that the legislative basis for imposing such conditions was not satisfactory. As a result, internet businesses may generally face increased scrutiny by FAS, and any M&A transactions involving Russia may face more uncertainty due to potential delays in obtaining Russian merger clearance.