The Constitutional Court of the Republic of Belarus comprising the Presiding Officer – Chairman P.P. Miklashevich, Deputy Chairwoman N.A. Karpovich, judges T.S. Boiko, T.V. Voronovich, L.G. Kozyreva, V.V. Podgrusha, V.N. Ryabtsev, A.G. Tikovenko, S.P. Chigrinov

on the basis of Article 116.1 of the Constitution of the Republic of Belarus, Article 22.3.2 of the Code of the Republic of Belarus on Judicial System and Status of Judges, Article 98 and Article 101.1 of the Law of the Republic of Belarus “On the Constitutional Proceedings”

in open court session in the exercise of obligatory preliminary review considered the constitutionality of the Law of the Republic of Belarus “On Making Alterations and Addenda to the Law of the Republic of Belarus “On Counteracting Monopolistic Practices and Developing Competition”.

Having heard the reporting judge T.S. Boiko, having analysed the provisions of the Constitution of the Republic of Belarus (hereinafter – the Constitution), the Law of the Republic of Belarus “On Making Alterations and Addenda to the Law of the Republic of Belarus “On Counteracting Monopolistic Practices and Developing Competition” and other legislative acts of the Republic of Belarus, the Constitutional Court of the Republic of Belarus found the following.

The Law of the Republic of Belarus “On Making Alterations and Addenda to the Law of the Republic of Belarus “On Counteracting Monopolistic Practices and Developing Competition” (hereinafter – the Law) was adopted by the House of Representatives of the National Assembly of the Republic of Belarus on 14 December 2017, approved by the Council of the Republic of the National Assembly of the Republic of Belarus on 19 December 2017 and submitted for signing to the President of the Republic of Belarus.

The Law (Article 1) provides a new wording of the Law of the Republic of Belarus “On Counteracting Monopolistic Practices and Developing Competition” (hereinafter – the Law on Counteracting Monopolistic Practices).

The Law was adopted to improve legal regulation on counteracting monopolistic practices and developing competition and then to harmonise and unify the provisions of this Law with the rules of relevant international legal acts constituting the Eurasian Economic Union law.

When evaluating the conformity of the Law to the Constitution the Constitutional Court proceeds from the following:

the fundamental constitutional values including the supreme one – the individual, his rights, freedoms and guarantees to secure them (Article 2.1 of the Constitution);

the constitutional provisions envisaging that the State shall grant equal rights to all to conduct economic and other activities, except for those prohibited by law, and guarantee equal protection and equal conditions for development of all forms of ownership; that the State shall guarantee to all equal opportunities for free utilisation of abilities and property for entrepreneurial and other types of economic activities which are not prohibited by law; that the State shall regulate economic activities in the interests of the individual and society (Article 13.2; Article 13.4; Article 13.5);

the constitutional rules on the State’s guaranteeing the right of property to everyone and the State’s contribution to its acquisition; on the proprietor’s right to possess, enjoy and dispose of property either individually or jointly with others; on the inviolability of property and the right to inherit property safeguarded by law; on the State’s protection of property acquired in accordance with the law (Article 44.1; Article 44.2; Article 44.3);

the State’s constitutional responsibility to take all measures at its disposal to establish the domestic and international order necessary for the full exercise of the rights and freedoms of the citizens of the Republic of Belarus that are specified by the Constitution (Article 59.1).

When reviewing the constitutionality of the Law the Constitutional Court also takes into consideration the legal positions that have been stated in the Court decision of 4 December 2013, adopted in the exercise of obligatory preliminary constitutional review of the Law of the Republic of Belarus “On Counteracting Monopolistic Practices and Developing Competition”.

1. The Law on Counteracting Monopolistic Practices changes the criteria of dominance by an undertaking (business) on the product market (Article 6.3); establishes the indicators of restricted competition (Article 7); clarifies the concept of “group of undertakings” (Article 8); refines the terminology of “administered high price (tariff)” and “administered low price (tariff)” (Articles 9 and 10); introduces the terms “monopsony position” and “monopsony low price (tariff)” and fixes their definitions (Article 11); envisages concerted practice of undertakings (businesses) on the product markets (Article 12).

Thus, in order to effectively identify and prevent dominance abuse on the markets the Law on Counteracting Monopolistic Practices scales down the collective market share of companies that may be referred to as dominant on a relevant product market. According to Article 6.3 of this Law as dominant shall be viewed any undertaking (except for the instances specified in Article 6.4) where the following cumulative conditions are fulfilled: the collective market share of no more than three undertakings (having the greatest single shares) exceeds 50 percent, or the collective market share of no more than five companies (having the greatest single shares) exceeds 75 percent; undertakings’ shares have been unchanged or subject to minor changes for at least one year or, if such period is less than a year, during the life period of the product market; and the relevant product market has barriers to entry of new companies.

Thus, the basic terminology and definitions in the Law as well as the dominance criteria set for the product markets are aimed at promoting competition at the state level, providing conditions for efficiency of product markets, preventing and suppressing monopolistic practices and unfair competition. Laid down and clarified in the Law, they comply with the constitutional provisions envisaging that the State shall regulate economic activities in the interests of the individual and society (Article 13.5); the exercise of the right of property shall not be contrary to social benefit and security, or infringe upon the rights and legally protected interests of others (Article 44.6).

2. The Law on Counteracting Monopolistic Practices specifies the prohibitions against dominance abuse, any agreements or concerted practice between undertakings that restrict competition. Any restrictive acts of legislation, other legal acts and measures (omission to act), agreements, coordinated acts of state authorities are also under prohibition (Articles 18, 20, 21 and 23). This Law also catches the acts intended to secure non-discriminatory access to goods (Article 19), lays down antitrust requirements for procurement of goods (Article 24), introduces the entire chapter 4 “Unfair Competition”.

Article 24.1 of the Law on Counteracting Monopolistic Practices prescribes that during the procurement process shall be prohibited any practices that result in or may result in the prevention, restriction or distortion of competition. These are provided in the specific list (paragraph 1).

The said provisions of Article 24.1 are aimed at protecting competition on the product market, identifying and suppressing collusion during the procurement process, providing equal conditions for companies of any form of ownership, ensuring effective spending of budget funds for the procurement of goods. Such approach is consistent with the provisions of the Constitution, according to which the State shall grant equal rights to all to conduct economic and other activities, except for those prohibited by law, and guarantee equal protection and equal conditions for development of all forms of ownership (Article 13.2); all shall be equal before the law (Article 22).

3. The provisions of Chapter 4 “Unfair Competition” of the Law on Counteracting Monopolistic Practices prohibit unfair competition that is made by discrediting, misleading, incorrect comparative advertising (Articles 25–27). They also catch prohibitions related to acquisition and (or) use of intellectual property, confusion, unlawful retrieval, use and disclosure of information constituting commercial, official and other secrets protected by law (Articles 28–30).

Article 28 of the Law on Counteracting Monopolistic Practices prescribes that shall be prohibited unfair competition related to acquisition and use of the exclusive right to brand identities of competitors and their products. This Article also makes it illegal for undertakings to sell, exchange or otherwise commercialise products when intellectual properties have been unlawfully used.

According to Article 9.2 of the Law on Counteracting Monopolistic Practices, subject to the provisions of Article 22.1, the price of a product shall not be referred to as monopolistically high price (tariff) if the product has applied an invention, protected in the territory of the Republic of Belarus, or if the direct method of its (manufacture) production is protected by the effective invention patent of the Republic of Belarus. In view of these provisions in conjunction with Article 28 the Constitutional Court finds such legal regulation to be consistent with Article 51.3 of the Constitution on the protection of intellectual property by law.

4. A number of provisions of the Law on Counteracting Monopolistic Practices prohibit either discriminatory conditions to be established (Article 18.1.1.10; Article 23.2.2.9), or indications to be given to undertakings of what products should be bought, as well as any restrictions on the consumers’ choice of companies supplying the product market (Article 23.2.2.5, Article 23.2.2.8).

In Article 1.9 of the Law on Counteracting Monopolistic Practices monopolistic practices are referred to as dominance abuse by an undertaking or group of undertakings; any agreements or concerted practice between undertakings as well as other acts (omission to act) that prevent, restrict or distort competition; that are prohibited by the present Law and other antitrust acts (paragraph 9). Any act or practice of an undertaking or a group of them directed to obtain advantage (benefit) from entrepreneurship that are contrary to this Law, other legislative acts and acts of antitrust legislation or requirements of good faith and rationality shall constitute an act of unfair competition given that it damages or is likely to damage other competitors or their business reputation (paragraph 10). In the Constitutional Court opinion the prohibition of monopolistic practices and unfair competition is lawful as they infringe upon the legal order in the area of fair competition, run counter to both the interests of companies and consumers as well as of the state and society as a whole.

In verifying the constitutionality of these provisions of the Law the Constitutional Court proceeds from its legal position stated it in a number of decisions including the above decision of December 4, 2013. According to it whatever be the grounds for legal restrictions, in view of the principle of proportionality they should secure proper balance of interests of individuals and the state. Meanwhile restrictions on constitutional rights should be legally admissible, socially justified, adequate, proportionate, necessary to protect other constitutionally significant values, and also meet the requirements of justice.

The Constitutional Court believes that regardless of the grounds the legal prohibitions in that area should secure proper balance between the constitutional rights, individual freedoms and public interests of the state and society. Thereat, such prohibitions may not be arbitrarily introduced by the legislator – they should base upon the principles and rules of the Constitution. The legislator shall not be able to ensure the rule of law and its components such as legality, protection of constitutional rights, freedoms and legitimate interests of individuals, rights and legitimate interests of organizations unless the constitutional requirements are fulfilled.

In highlighting the constitutional and legal meaning of prohibitions against monopolistic practices and unfair competition the Constitutional Court states that the rules of Article 1 of the Law that specify the existing prohibitions and establish the new ones, are consistent with the provisions of Article 13.2 and Article 13.4 of the Constitution envisaging some instances for economic, business and other activities to be under prohibition by law.

5. Some measures of Article 19 of the Law on Counteracting Monopolistic Practices are intended to secure non-discriminatory access to goods. As Article 19 prescribes, where the antitrust authority finds a company to have abused its dominant position, the Council of Ministers of the Republic of Belarus may, in order to prevent discriminatory conditions, set the rules of equal access to goods that are produced and (or) sold by the company dominating the market (with the share exceeding 70 percent of the relevant product market while not being a natural monopoly). In respect of such companies the antitrust authority, intended to secure equal access to those companies’ products, may take some measures including orders on the commercial practice rules to be used. The content of the rules and the procedure for their publication shall be defined by the antitrust authority.

In reviewing the constitutionality of those provisions of the Law the Constitutional Court concludes that such legislative regulation is based upon the provisions of Article 107 of the Constitution empowering the Government to ensure a uniform economic, financial, credit and monetary policy, and state policy in the field of science, culture, education, health care, ecology, social security and remuneration for labour; take measures to secure the rights and freedoms of citizens, protect the interests of the state, national security and defence, protection of property, maintain public order and combat crime; exercise other powers entrusted to it by the Constitution, laws and acts of the President (paragraphs 5, 6, 10).

At the same time the analysis of the content of Article 19 of the Law on Counteracting Monopolistic Practices shows that the Law neither provides for issues to be dealt with by the Council of Ministers while laying down the rules for equal access to goods, nor envisages content requirements to be met by the antitrust authority while setting the commercial practice rules.

According to the Constitutional Court, in assuming their discretionary powers, the competent authorities should neither restrict the rights of persons provided by law nor regulate the functioning of undertakings (businesses) unless required to secure equal access to goods for any consumer. Nor should they infringe upon the very essence of commercial freedom. To that end, while implementing their powers to lay down rules referred to in the Law on Counteracting Monopolistic Practices, the Council of Ministers and the antitrust authority should base upon the provisions of this Law and other legislative acts regulating relationships in this area. They also should proceed from the constitutional values and principles and specifically stipulated in Article 23.1 of the Constitution which allows for restriction of personal rights and freedoms only in the instances specified by law and in the constitutionally significant interests.

The legal position of the Constitutional Court is built upon the constitutional provisions prescribing that the Republic of Belarus shall be bound by the principle of supremacy of law; the State and all the bodies and officials thereof shall operate within the confines of the Constitution and acts of legislation adopted in accordance therewith (Article 7.1; Article 7.2); the State shall grant equal rights to all to conduct economic and other activities, except for those prohibited by law, and guarantee equal protection and equal conditions for development of all forms of ownership; the State shall guarantee to all equal opportunities for free utilisation of abilities and property for entrepreneurial and other types of economic activities which are not prohibited by law; the State shall regulate economic activities in the interests of the individual and society (Article 13.2; Article 13.4; Article 13.5).

6. The provisions of Chapter 6 of the Law on Counteracting Monopolistic Practices regulate the procedure for establishing a violation or non-violation of antitrust legislation.

Articles 36–47 of Chapter 6 provide grounds for establishing a violation or non-violation of antitrust legislation and periods for their establishment; application requirements and reasons to dismiss the application of violation without its hearing on the merits; the procedure for considering the application, as well as instances where consideration of the application or violation shall be suspended or dismissed. Those articles also lay down the decision making procedure for establishing a violation or non-violation of antitrust legislation, define a decision content and procedure for explanatory statement to the decision and (or) order; the procedure for reviewing such decisions upon newly discovered evidence and rules of appealing against them.

In the Constitutional Court opinion the procedure for establishing a violation or non-violation of antitrust legislation, as prescribed by the Law on Counteracting Monopolistic Practices, is intended to provide and maintain efficient legal mechanisms for protecting the rights and legitimate interests of legal persons and individuals against unlawful acts (omission to act) of persons including undertakings (businesses) which dominate the product market, that have or may have effect of preventing, restricting or distorting competition. Such legislative regulation is consistent with the provisions of the Constitution prescribing that the State shall safeguard the rights and freedoms of individuals in the Republic of Belarus; guarantee everyone the right of property and shall contribute to its acquisition; property acquired in accordance with the law shall be protected by the State (Articles 21.1; 44.1; 44.3); state bodies, officials and other persons who have been entrusted to exercise state functions shall, within their competence, take necessary measures to implement and protect personal rights and freedoms (Article 59.2).

7. To prevent violation of antitrust legislation the Law on Counteracting Monopolistic Practices empowers the antitrust authority to forward to an official of the undertaking (business) or the state body a written warning on the impermissibility of acts (omission to act) that may lead to violation of antitrust legislation (Article 14.34: Article 16). It is also provided, that to prevent acts (omission to act) that have or may have effect of preventing, restricting or distorting competition, that damage the rights, freedoms and legitimate interests of legal persons or individuals, where the signs of violation of antitrust legislation have been identified, as envisaged in Article 18.1 (paragraphs 1.5–1.8; 1.10) and Article 23 of the Law, the antitrust authority, pending a decision on a violation (non-violation) of antitrust legislation, shall forward to undertakings (businesses), their officials, as well as to state bodies and their officials a written warning (Article 14.7; Article 43).

The Constitutional Court finds that such legal regulation is intended to introduce precautionary and preventive measures allowing the antitrust authority to choose the best way of responding to violations of antitrust legislation without liability measures being applied to undertakings (businesses) and other persons. It is also aimed to quickly restore the rights of other persons affected by acts (omission to act) of companies indicative of a violation of antitrust legislation; to secure the balance of public and private interests. Such regulation is in line with the provisions of the Constitution on that the State shall safeguard lawfulness and law and order (Article 1.3); take all measures at its disposal to establish the domestic order necessary for the full exercise of the rights and freedoms of the citizens of the Republic of Belarus (Article 59.1).

8. As the Law on Counteracting Monopolistic Practices prescribes, the decision on a violation (non-violation) of antitrust legislation may be appealed to the court within 30 consecutive days as from the date of its adoption (Article 44.6), and the order – within 30 consecutive days as from the date the person against whom it has been issued, becomes or should have become aware of it. In the instance of appeal against the decision on a violation (non-violation) of antitrust legislation and (or) the order, the order shall be suspended until the court decision comes into legal force (Article 45.4; Article 45.5).

In the Constitutional Court opinion, the established legal regulation points to implementation of the principle of the rule of law enshrined in Article 7.1 of the Constitution and of its most important element – the right to judicial protection. So, it is consistent with Article 60.1 of the Constitution on everyone’s guaranteed protection of his rights and freedoms by a competent, independent and impartial court within the time limits specified by law.

9. Article 49.1 of the Law on Counteracting Monopolistic Practices provides that if required by the antitrust authority, the undertakings (businesses) and officials of those undertakings (businesses) acting as legal persons, the state bodies and their officials, the legal persons, that are not related to business, and their officials, as well as individuals not related to business shall submit documents, explanations and information in written and (or) oral forms, including commercial, official secrets, secrets protected by law, as well as confidential information on depositors and information from the register of security holders.

The Constitutional Court deems that to some extent such obligation to inform, enshrined in the Law, may affect everyone’s constitutional rights to protection against unlawful interference with his private life (Article 28); to restriction of the use of information (Article 34.3). However that obligation is justified and lawful as it is aimed at the fulfillment by the antitrust authority of its main functions and powers as defined in Articles 13 and 14 of the Law on Counteracting Monopolistic Practices. The said obligation is also in line with Article 23.1 of the Constitution allowing for restriction of personal rights and freedoms only in the instances specified by law, in the interests of national security, public order, protection of the morals and health of the population as well as rights and freedoms of other persons.

According to Article 15 of the Law on Counteracting Monopolistic Practices information constituting commercial, official secrets, other secrets protected by law, received by the antitrust authority in the exercise of its powers shall not be subject to disclosure, except where provided by legislative acts. The employees of the antitrust authority shall be responsible for disclosure of information in accordance with legislative acts. Proceeding from the above constitutional provisions in conjunction with Article 15 of the Law on Counteracting Monopolistic Practices the Constitutional Court pays attention of law-enforcement bodies to that the rules and measures of information confidentiality as well as security of its storage and communication, protection against third parties’ intervention or use of information for improper purposes must be strictly respected.

10. The Law on Counteracting Monopolistic Practices has been also changed with a view to bring it into line with the provisions of the Treaty on the Eurasian Economic Union of May 29, 2014 (hereinafter –the EAEU Treaty).

Thus, taking into account the provisions of Article 76.7 of the EAEU Treaty the Law on Counteracting Monopolistic Practices does not catch the relations that are regulated by common competition rules in the cross-border markets given their monitoring falls within the competence of the Eurasian Economic Commission in accordance with the treaty of the Republic of Belarus. The criteria for classifying the cross-border market shall be established in accordance with the treaty of the Republic of Belarus (Article 3.6).

By virtue of Article 22.2.2.2. of the Law on Counteracting Monopolistic Practices shall be allowed vertical agreements where the single share of an undertaking (a party to them in the market of a product being the subject of such vertical agreement) does not exceed 20 percent. The increase in the interest rate from 15 to 20 is required by the provisions of Section II (paragraph 6.2) of the Protocol on General Principles and Rules of Competition (Appendix No. 19 to the EAEU Treaty).

In addition, the Law on Counteracting Monopolistic Practices introduces the notion of “signs of restriction of competition” (Article 7). It also draws lines and provides for detailed rules on prohibitions against agreements restricting competition (Article 20) and concerted practice of undertakings (businesses) (Article 21). Those changes and additions comply with the provisions of Article 76 “Common Rules of Competition” of the EAEU Treaty and Section I (paragraph 2.15) of the Protocol on General Principles and Rules of Competition (Appendix No. 19 to the EAEU Treaty).

The Constitutional Court finds such legislative regulation to be consistent with the provisions of Article 8 of the Constitution envisaging that the Republic of Belarus shall recognise the supremacy of the generally recognised principles of international law and shall ensure the compliance of laws therewith; the Republic of Belarus in conformity with the rules of international law may on a voluntary basis enter interstate formations and withdraw from them (paragraphs 1 and 2).

Thus, as it follows from the revealed constitutional and legal meaning of the Law, its rules are aimed at further constitutionalisation of public relationship involving the protection and development of competition, including prevention and suppression of monopolistic practices and unfair competition. The rules are also intended to secure such constitutional value as constitutional economy, of which the most important components are the provision by the state of everyone’s equal rights to conduct economic and other activities except for those prohibited by law, as well as equal protection and equal conditions to develop all forms of ownership, equal opportunities for free utilisation of abilities and property for entrepreneurial and other types of economic activities which are not prohibited by law. The rules are also designed to protect the constitutional rights and freedoms of man and of the citizen, the rights and legitimate interests of companies.

The Law has been adopted by the House of Representatives of the National Assembly of the Republic of Belarus within its competence under Article 97.1.2 of the Constitution; and approved by the Council of the Republic of the National Assembly of the Republic of Belarus within its competence under Article 98.1.1 of the Constitution. The houses of the National Assembly of the Republic of Belarus have acted within their competence under Articles 97–100 of the Constitution.

The Constitutional Court therefore concludes that the Law is in conformity with the Constitution as regards the contents of rules, form of the act and procedure of adoption.

Guided by Article 116.1, Article 116.7 of the Constitution of the Republic of Belarus, Article 24.2 of the Code of the Republic of Belarus on Judicial System and Status of Judges, Articles 103–105 of the Law of the Republic of Belarus “On the Constitutional Proceedings” the Constitutional Court of the Republic of Belarus

RULED:

1. To recognise the Law of the Republic “On Making Alterations and Addenda to the Law of the Republic of Belarus “On Counteracting Monopolistic Practices and Developing Competition” to be conforming to the Constitution of the Republic of Belarus.

2. The present Decision shall come into force from the date of adoption.

3. To publish the present Decision in accordance with the legislation.

Presiding Officer –

Petr Miklashevich,

Chairman of the Constitutional Court

of the Republic of Belarus