European Union: Amendments to Russia’s Competition Law May Necessitate Revision of Existing Distribution Agreements

Last Updated: 1 February 2010
Article by Kiran S. Desai and Elena Klonitskaia

Originally published 26 January 2010

Keywords: Russia, competition law, EU, distribution agreements, block exemption regulation

In 2009, the Russian legislator amended Russia's law "On Protection of Competition" No. 135-FZ (the new Law). In parallel with the adoption of the new Law, the government of Russia issued Resolution No. 583 "On Permissible Agreements Between Undertakings" (the Resolution No. 583) on the application of part 2 of Article 11 of the new Law (part 2 of Article 11 of the new Law prohibits agreements by undertakings and/or concerted practices other than those falling under part 1 of Article 11 and except for vertical agreements exempt under Article 12 that have as their object or effect the prevention, restriction or distortion of competition) to categories of vertical agreements and research and development agreements. The Resolution, which has a five-year sunset provision, went into effect on 31 July 2009.

According to the new Law, prohibitions provided in part 1 of Article 11 have been revoked with regard to vertical agreements. Part 1 of Article 11 prohibits agreements by undertakings and concerted practices that may lead to:

  • Fixing prices and other trading conditions, e.g. rebates or price increases;
  • Bid-rigging;
  • Sharing out of product or geographic market or customers;
  • Refusing transactions with certain suppliers or customers, without commercial or technological grounds (i.e. applying dissimilar conditions to equivalent transactions);
  • Making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or commercial usage, have no connection with the subject of such contract;
  • Fixing different prices for one and the same product;
  • Limiting or ceasing commercially profitable production of commodities, for which there is demand on a market;
  • Restriction of market access to competitors; or
  • Collusion on terms of memberships or participation in associations if it has an anti-competitive object or effect.

Now, as these prohibitions have been lifted with respect to vertical agreements by virtue of part 1.1 of Article 11 of the new Law, the following rules apply with respect to vertical agreements in Russia.

According to Article 12 of the new Law the following vertical agreements (except for agreements between financial organisations) are considered to be permissible: (i) franchising agreements or agreements granting a commercial concession concluded in written form, and (ii) vertical agreements between undertakings, whose individual market share on the relevant market does not exceed 20 percent.

Instead of the prohibitions revoked by virtue of part 1.1 of Article 11, under the new Law part 1.2 of Article 11 prohibits vertical agreement (except for agreements exempt under Article 12), if

  • Such agreement lead or are likely to lead to fixing prices of the subsequent resale of the goods; and/or
  • The agreement restricts the buyer's ability to sell the goods of competing suppliers, except when the buyer sells the goods under a trademark or proprietary name of the supplier or manufacturer of the goods.

Part 1 of Article 13 of the new Law provides that the prohibition under part 2 of Article 11, which applies also with respect to vertical agreements (except for the agreements exempt under Article 12), may be declared inapplicable where the agreements or concerted practices do not afford the undertakings the possibility of eliminating competition in the related market, do not impose restrictions that are not pertinent to the attainment of the undertakings' objectives and that have, or are likely to have, as their effect:

  • Improvement of the production, or distribution of goods, or promotion of the technical or economic progress, or improvement of the competitiveness of Russian products in the world markets; and
  • Allowing consumers a fair share of the resulting benefits proportionate or adequate to benefits obtained by the undertakings.

The block exemption adopted by Russia's government (Resolution No. 583) provides further guidance on the application of part 2 of Article 11 of the new Law and specifies what categories of vertical agreements (and also research and developments agreements, which are not touched upon in this article) should generally not fall within the prohibition of part 2 of Article 11.

Accordingly, paragraph 1 of the general exemptions applicable to certain categories of vertical agreements and adopted by Resolution No. 583 provides that vertical agreements are permissible if all of the following conditions are met:

  1. the supplier sells the product to two or more (i) buyers and the share of the supplier on the market concerned is less than 35 percent, or the supplier sells the product to one buyer whose market share is less than 35 percent;
  2. the supplier and the buyer do not compete or (ii) compete on a market where the buyer purchases the goods for further resale; and
  3. the buyer does not manufacture goods (iii) interchangeable or competing with the goods purchased from the supplier.

Paragraph 2 of the general exemptions applicable to certain categories of vertical agreements adopted by Resolution No. 583 provides a list of restrictions or clauses that must not be contained in the vertical agreements (unless such agreement is exempt under Article 12 of the new Law). There is also a three-year maximum period for the non-compete obligation and a three-year maximum period of the minimum purchasing requirement, as specified below. Accordingly, the legislator explicitly prohibits the following clauses contained in vertical agreements:

  • Clauses restricting the buyer's ability to determine its sale price, including clauses whereby the supplier imposes a minimum price or fixed price.
  • Clauses restricting the buyer's ability to sell the goods within certain territory or to certain category of customers, except for the restriction of the buyer's (except for the retailers) ability to sell into the exclusive territory allocated by the supplier to another buyer or except for the restriction of sales into the exclusive territory reserved to the supplier.
  • Clauses restricting the supplier's ability to sell spare parts and components, assembled or incorporated by the buyer, to end-users or to repairers or other service providers not entrusted by the buyer with the repair or servicing of its goods.
  • Clauses restricting the buyer's ability to manufacture, purchase and/or sell goods that are interchangeable, and that compete with, the goods purchased from the supplier (non-compete obligation), except when the non-compete obligation entered into force before the entry into force of the Resolution (in which case the restriction shall be valid, but for a period not exceeding three years from the date of the Resolution), or except when the buyer (except for the retailers) accepted the non-compete obligation for the first time and for a period not exceeding three years, or except when the buyer operates from land or premises leased or otherwise transferred by the supplier to the buyer.
  • Clauses whereby the supplier forces the buyer to accept a minimum purchasing requirement of at least 50 percent of the buyer's annual turnover (in value) of goods (including interchangeable goods), except when such minimum purchasing obligation entered into force before the entry into force of the Resolution (in which case the obligation shall be valid, but for a period not exceeding three years from the date of the Resolution), or except when the buyer (except for the retailers) accepted the obligation of the said minimum purchasing requirement for the first time and for a period not exceeding three years, or except when the buyer operates from land or premises leased or otherwise transferred by the supplier to the buyer.
  • Clauses obligating the buyer to include in its agreement with its customers restrictions on the customers' ability to resell the goods.

The Resolution specifies that if the supplier agrees to allocate an exclusive territory to the buyer, such agreement should also contain the restriction of the buyer's ability to purchase from other suppliers interchangeable goods for resale in the same or partially overlapping territory.

Finally, the Resolution No. 583 provides for the following rule for the purposes of applying the market share threshold provided in paragraph 1 of the block exemption applicable to certain categories of vertical agreements: if the market share is initially not more than 35 percent, but subsequently rises above 35 percent, the exemption provided for in paragraph 1 shall continue to apply for six months following the year in which the level of 35 percent was fist exceeded.

The newly adopted block exemption and the set of amendments to the new Law applicable to vertical agreements as described above are likely to warrant revision of existing distribution agreements in Russia.

Learn more about our Antitrust & Competition practice.

Visit us at

Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and JSM, a Hong Kong partnership, and its associated entities in Asia. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

Copyright 2010. Mayer Brown LLP, Mayer Brown International LLP, and/or JSM. All rights reserved.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.