The general rule is that if an economic entity (hereinafter: Undertaking) performs a business activity within the country, it shall comply with the rules and regulations governing the respective activities.

Antitrust laws are designed to promote fair competition and prevent anti-competitive practices that have the ability to harm consumers, limit market innovation and, as an ultimate result, harm competition itself. In simple words, antitrust compliance is meant to ensure that Undertaking’s actions and practices do not infringe on applicable competition/antitrust laws and regulations. Compliance includes avoiding activities such as price fixing, market allocation, bid rigging, monopolisation, disclosure of market strategy, price strategy, etc.

To ensure antitrust compliance, undertakings are highly suggested to adopt an antitrust compliance programme that involves regular training for employees/divisions, ongoing monitoring of business activities and regular assessment of potential antitrust risks.

RA regulatory provisions on Antitrust Compliance:

The Republic of Armenia (RA) law on Protection of Economic Competition (Law) [1] does not specifically discuss antitrust compliance itself, does not underline the importance or even the definition of an antitrust compliance programme as well as does not anyhow highlight a requirement of having such a programme in place. However, the law provides the authorities of the RA Competition Protection Commission (hereinafter: the Authority or Commission) where inter alia also the authority to establish a methodology for choosing the responsibility measure and fine calculation [2] (hereinafter: Methodology), which discusses compliance programme as a possible mitigation.

From the adopted methodology’s perspective, certain infringements may be mitigated considering the existence of the compliance programme (in some cases, also the real intention to adopt such a programme). In particular, the methodology inter alia considers cooperation with the Commission as a mitigating circumstance in case of the revealed infringement.

Compliance Programme as a mitigation:

From the perspective of the Commission and according to the Methodology implemented for the evaluation of the Undertaking’s cooperativeness, the Commission inter alia considers the existence and certain procedures according to the antimonopoly compliance programme adopted and followed by the undertaking.

Specifically, the Methodology defines different scenarios’ mitigation effects for the calculated decrease of an amount of responsibility measure. Thus, the mitigation effect of the Compliance programme is based on the “earlier, the better” principle.

The Procedure:

There are certain steps to be undertaken by the undertaking to ensure continuous compliance with the antitrust laws. For the adoption and effectiveness of the above-mentioned steps, a proficient legal advisor is a must. The procedure involves all interested parties at guidance and support of a professional legal advisor.

Eventually, with professional help, the undertaking will implement a Compliance programme designed specifically for it and address all the applicable risks.

Current situation and vision:

The Compliance programme has been implemented to mitigate the responsibility measure since 2022. It is worth noting that in Armenia, implementing a compliance programme is left at the undertakings’ discretion, and there is no analysis of the number of undertakings that have already implemented one.

In the meantime, in many countries and unions, programme implementation is mandatory for undertakings considered large and medium-large. Such an approach considering the tendency may also be implemented in Armenia. Compliance programmes are largely known and successfully implemented in the EU member states, the USA, and the Eurasian Union member countries (comparatively recent).

Conclusion:

Many undertakings operate without aligning their activities with the Law and even without considering the risks of such activities, which may result in comparatively large responsibility measures (up to 10% of the previous year’s revenue). Therefore, to avoid such complications, professional legal assistance is of the essence, irrespective of the size of the undertaking and the years it has operated on the market.

Author:

Arthur Buduryan (Mr)

Partner, Legelata Law Firm

DISCLAIMER:

This material is produced for Legelata LLC. The information contained in this piece is provided for general informational purposes only and does not contain a comprehensive analysis of each item described. Prior to undertaking (or not to undertaking) any actions, the reader is advised to seek professional advice tailored to their specific situation. Legelata or the author accepts and holds no liability for acts or omissions taken in reliance upon the contents of the contained information in this material.

[1] RA Law on the Protection of Economic Competition, as of 06 November 2000.

[2] Ibid. Article 37(1) point 21.