Shell to appeal decision of antimonopoly committee of Ukraine in its investigation into fuel retailers
груд. 29, 2016
On 28th October 2016 the Antimonopoly Committee of Ukraine (the AMCU, the Committee) imposed a fine on Shell for alleged anticompetitive concerted actions and evasion of price competition in the fuel retail market. Having reviewed the original full text of the AMCU decision, Shell rejects the findings and conclusions of the AMCU and will appeal the decision in Ukrainian courts.
The investigation by the AMCU into certain fuel retailers in Ukraine, including Shell Retail Ukraine, represented by Alliance Holding LLC, over the period of January 2013 to January 2016 concluded with the retailers being found guilty of engaging in “anticompetitive concerted actions” in the form of price fixing and evading price competition through the application of customer loyalty and marketing programmes and product discounts. For these alleged violations, the AMCU has imposed a fine on Alliance Holding LLC of just under UAH 40 million.
“We consider that the AMCU has erred in its conclusions in the case with regard to Shell’s alleged involvement in the price fixing and evasion of price competition,” said Peter Kerekgyarto, GM Shell Retail Ukraine and Country Chair of Shell Ukraine. “Shell works and will continue working in Ukraine in a fair and transparent manner, fully in line with all Ukrainian legal requirements, including competition law, providing customers with high-quality fuel at an economically based price in a highly competitive market”,
Shell are concerned that firstly, the Committee disregarded the information provided by Shell to the AMCU. This provided clear evidence that any changes in retail fuel prices in the Shell network were as a result of purely economic and business factors for Shell.
Secondly, the AMCU has failed to provide any evidence that Shell had engaged in any anticompetitive concerted actions in its retail fuel operations, including price fixing with other market players, or that Shell used customer loyalty programs, marketing programmes or discounts in order to evade price competition.
Thirdly, the Committee ignored the findings and recommendations submitted to it by the Business Ombudsman Council in Ukraine, which clearly indicated to the AMCU that it should take all of the evidence that Shell provided into account.
Shell believes that it has strong grounds to contest the AMCU decision and intends to appeal it in the Ukrainian Courts.
Shell has always played a leading role in promoting the use of competitive and ethical fuel pricing practices in Ukraine. In the course of the AMCU’s investigation, Shell took the lead in compiling a Code of Conduct for the retail fuel sector, formally titled “Rules of Professional Ethics in Competition as regards Fairness and Transparency on Retail Fuel Market in Ukraine”, which was agreed by the AMCU and signed before the AMCU’s decision was taken. The Code of Conduct was driven by global best practice and demonstrates the good will of the retail fuel sector in supporting a competitive environment, treating customers fairly and ethically, and maintaining a close dialogue with the regulatory authorities in Ukraine.
As regards competition authority intervention in the Ukrainian retail fuel market, Shell urges the Government of Ukraine and the AMCU to avoid pursuing and penalizing law-abiding fuel retailers in the absence of any evidence of an infringement.