The Government of RF states additional requirements for agreements of business entities

The Federal Law "On competition protection" provides the Government of RF with authorities to determine cases when agreements and coordinated actions of business entities are acceptable.
Referring to such authority, the Government of RF actually set not only conditions when such agreements are acceptable but also conditions when such agreements are unacceptable.

Decision of the Government of RF dated July 16, 2009 No. 583 states requirements (general exceptions) in regard of agreements by and between purchasers and sellers and in regard of agreements by and between business entities on joint research activities and application of research and (or) research and technical results received.

The agreement by and between the purchaser and the seller shall be acknowledged acceptable if the following terms and conditions are jointly met:

1. a seller shall sell goods to two or more purchasers and shall have a share in this product market of less than 35% or in accordance with the agreement a seller shall sell goods to a sole purchaser whose share in this product market makes up less than 35%;
2. a seller and a purchaser shall not enter into competition or shall compete at goods market where a purchaser shall purchase goods for the purposes of further sale;
3. a purchaser shall not manufacture goods which may be mutually replaced with goods being the subject of agreement.

In this case there are a number of terms and conditions under which an agreement shall be unacceptable.
Such conditions shall particularly be as follows:

• conditions restricting a purchaser’s ability to set the price for re-sale of goods independently;
• conditions providing for a purchaser's refusal to sell goods in a certain area or to certain purchasers;
• conditions prohibiting a purchaser to produce, to purchase or to sell goods which are mutually replaceable in regard to goods he purchases or may purchase in accordance with the agreement;
• conditions obliging a purchaser to purchase from a seller more than 50% (in value terms) of the total amount of goods taking into account alternate goods purchased by a purchaser during a year.

If application of the said Decision of the Government of RF leads to more severe competition supervision, it will therefore result in significant restriction of conclusion of exclusive distributor contracts widely used at present.