Ilyashev & Partners Successfully Defends Ukrainian Producer in AMCU in Case of Monopoly Abuse by Vinnitsaoblenergo JSC

Ilyashev & Partners Law Firm successfully represented a Ukrainian producer of fuel briquettes – KMO LLC – in the AMCU in a case of violation by the monopolist JSC Vinnitsaoblenergo of the legislation on protection of economic competition in the market for the provision of services for connecting electrical installations to electrical networks in Vinnytsia region.

KMO LLC carries out production activities at its own facility in the Vinnytsia region. Back in 2022 the company applied to JSC Vinnitsaoblenergo with a request to increase the permitted capacity of electrical installations in order to launch an additional production line at the industrial complex.

Although the technical conditions and existing infrastructure allowed JSC Vinnitsaoblenergo to increase the capacity the distribution network operator put forward a number of unreasonable additional requirement to the Ukrainian producer, which had to be fulfilled at KMO LLC’s expense for a total amount of about UAH 6 million: construction of a new transformer substation, laying of a power line, installation of switching equipment and other activities. Fulfilment of those requirement would have led to significant material costs and prevented the enterprise from functioning in its normal manner.

To protect its interests the Ukrainian producer sought legal advice from Ilyashev & Partners Law Firm.

In order to clarify all the circumstances of the case Ilyashev & Partners’ Antitrust and Competition Practice team initiated an appeal to the regulatory authorities, including the National Energy and Utilities Regulatory Commission, the State Inspectorate for Energy Supervision in Vinnytsia region, etc. The received documents and calculations demonstrated that JSC Vinnitsaoblenergo already had all the technical capabilities to increase the capacity of the enterprise and that the network operator’s requirements were unreasonable and violated consumer rights.

Ilyashev & Partners Law Firm team filed a complaint with the AMCU regarding JSC Vinnitsaoblenergo’s violation of the legislation on protection of economic competition. The evidences collected by the lawyers showed that actions of JSC Vinnitsaoblenergo, which consisted groundless requirements to KMO LLC, violated the legislation on protection of economic competition in the form of abuse of a monopoly position in the market, caused by the lack of competition in the relevant market.

The case review lasted for over a year, but thanks to the clear legal position and professional analysis of Ilyashev & Partners’ team, the administrative board of the South-Western Interregional Territorial Department of the AMCU recognized the JSC Vinnitsaoblenergo’s actions as a violation of the legislation on protection of economic competition and obliged the latter to stop the abuse. In addition, the monopolist was imposed the fine maximum possible in the given circumstances.

This is not the first victory of Ilyashev & Partners Law Firm in cases concerning abuse of monopoly position by natural monopolies, such as JSC Ukrzaliznytsia and the State Enterprise Ukrainian Sea Ports Authority.

The case was handled by Partner and Head of Antitrust and Competition Practice Oleksandr Fefelov.