Behavioral and Structural Remedies in Transaction Clearances by FAS Russia

 

February 16, 2026

BRACE Law Firm ©

The antimonopoly authority's use of behavioral and structural remedies allows it to achieve government control objectives by preventing the emergence of conditions and prerequisites for the restriction of competition.

In this article, we analyze the definitions, advantages, and disadvantages of these remedies, as well as the goals and objectives pursued by the antimonopoly authority when applying them during economic concentration transaction controls.

Why Does FAS Russia Issue Remedies During Transaction Clearances?

Economic concentration control is a vital tool for creating a competitive market environment. The primary instruments for such control are the antimonopoly authority’s powers to approve or prohibit a transaction, as well as to impose additional conditions (remedies) on its participants. These powers are granted to FAS Russia by Federal Law No. 135-FZ dated July 26, 2006, On Protection of Competition (the "Law on Protection of Competition").

When clearing transactions, the antimonopoly authority examines the transaction’s impact on the state of competition in the relevant commodity markets. Specifically, transactions defined by Articles 27–29 of the Law on Protection of Competition fall under antimonopoly control. Such transactions require the prior consent of the antimonopoly authority:

• The creation and reorganization of commercial organizations, and the conclusion of joint venture agreements between competing Economic Entities;
• Transactions involving shares (interests), property of commercial organizations, or rights in relation to commercial organizations;
• Transactions involving shares (interests), assets of financial organizations, or rights in relation to financial organizations.

Pursuant to Article 23 of the Law on Protection of Competition, the antimonopoly authority may issue mandatory remedies to Economic Entities when clearing these transactions. A remedy consists of mandatory conditions from the antimonopoly authority, and the transaction or action cannot be considered cleared without their fulfillment. The purpose of a remedy is to reduce or eliminate potential anti-competitive consequences in the commodity markets affected by the transaction.

Under Clause 4, Part 2, Article 33 of the Law on Protection of Competition, the antimonopoly authority may decide to clear an action or transaction by issuing a remedy to ensure competition.

A remedy issued as a result of state economic concentration control constitutes mandatory conditions established by the antimonopoly authority. Failure to fulfill these conditions means the transaction or action is not cleared.

Such a remedy aims to ensure competition and may include the following obligations for the acquirer, its group of persons, and the target of the transaction:

• Ensure the fulfillment of all short-term and (or) long-term contracts and product supply agreements in effect on the transaction date;
• Ensure the preservation of technological capacity for product manufacturing if there is demand or placed orders, provided that profitable production is possible;
• Notify the antimonopoly authority of price increases exceeding a certain percentage compared to the price of the corresponding month of the previous year, providing justification for the growth and attaching supporting documents and calculations;
• Develop, approve, and submit to FAS Russia a pricing and (or) trade-and-distribution policy for product sales;
• Sell products in accordance with the pricing and (or) trade-and-distribution policy on non-discriminatory terms, and ensure that consumers are informed of the policy’s conditions;
• Notify FAS Russia of any changes to the pricing policy or trade-and-distribution policy;
• Submit quarterly information to FAS Russia on the main indicators of the business activities of the acquirer, the target, and Economic Entities within their group that produce and (or) sell products, using established forms.

Furthermore, Part 10, Article 32 of the Law on Protection of Competition allows participants to develop and submit their own draft remedy to FAS Russia, which may be issued following the review of the application or notification documents.

What Is Meant by Behavioral and Structural Remedies?

Clearing a transaction with the issuance of a remedy is an outcome often viewed negatively by Economic Entities and seen as interference in business activities [1].

According to FAS Russia clarifications [2], practice distinguishes between:

• Behavioral remedies, which aim to ensure fulfillment of specific behavioral conditions (developing policies, procedures, standard contracts, implementing a justified pricing policy, etc.);
• Structural remedies, which aim to change the structure of the commodity markets affected by the transaction (for example, the divestiture of assets by transaction participants to reduce their market share).

The division of remedies into structural and behavioral during economic concentration control is conditional. Proposed remedies must be analyzed on a case-by-case basis to determine their ability to eliminate competition-related risks, including the creation or strengthening of a dominant position.

Structural or behavioral remedies may be applied depending not only on the form of economic concentration (horizontal, vertical, etc.) but also on the specific circumstances of a given transaction. Additional criteria for choosing a remedy include the technological characteristics of the affected markets, the activities of the parties, demand for the parties' assets, and the impact of the parties' technologies on the state of market competition.

The requirements imposed within a remedy must be necessitated by the need to ensure market competition and eliminate the consequences of a specific transaction or action.

FAS notes that the mere existence of "vertical" relations (buyer-seller relations) between an acquirer and an economic concentration target is not sufficient grounds for issuing a remedy if the state of competition in the affected markets—where the acquirer (and its group) and the target (and its group) operate—will not be restricted after the transaction (i.e., shares of independent entities and their number do not change, entry barriers are not created, etc.) [3].

In Case No. A40-187877/2018, the antimonopoly authority reviewed an application for the acquisition of a 100% interest in the charter capital of an LLC. FAS Russia granted preliminary consent but issued a remedy requiring the parties to use "hopper cars, including those under lease/leasing, for the transport of grain cargo, prohibiting their use for non-food cargo; and to ensure price stability for grain transport services at a level not exceeding the actual inflation of the previous period". FAS Russia argued that the "acquisition could lead to the restriction of competition in the market for specialized rolling stock services for grain transport by public rail within the Russian Federation". Upon review, the courts correctly concluded that "the antimonopoly authority had no grounds to issue a remedy for actions aimed at ensuring competition; they reasonably recognized that imposing these obligations placed the applicants in an unequal position compared to other Economic Entities in this market" [4].

A remedy also cannot be issued solely because the target already holds a dominant position before the transaction, provided the transaction itself does not strengthen that dominance or otherwise affect competition (e.g., by increasing market share, reducing independent competitors, or creating entry barriers). However, the antimonopoly authority may issue a remedy if it establishes a causal link between the transaction and the emergence or strengthening of negative effects on competition.

It is also impractical to issue a remedy solely because the target operates in markets under a natural monopoly, as transactions in such markets cannot restrict competition due to its inherent absence. Nevertheless, when reviewing acquisitions involving natural monopoly entities, the potential negative effect on related markets that are not under a natural monopoly should be analyzed [5].

What Are the Advantages and Disadvantages of Behavioral and Structural Remedies?

Each type of remedy has its own advantages and disadvantages. As noted in legal literature, structural remedies require Economic Entities to divest, release, or spin off specific tangible or intangible assets. By affecting the source of the dominant entity's monopoly behavior, they help eliminate or reduce its dominant position and create favorable conditions for other entities to enter the market. They are also relatively simple to design and apply; due to their one-time nature, they do not require the extensive, time-consuming monitoring typical of behavioral conditions. Furthermore, they are difficult for companies to circumvent [6].

Despite these advantages, structural remedies have significant drawbacks. Dividing a company can destroy its business model, creating a risk that the Economic Entity will exit the market. This may occur in the following cases:

• Loss of economies of scale or diversification;
• Reduction of incentives for innovation;
• A need to duplicate capital-intensive and labor-intensive investments.

Additionally, structural measures may fail to yield the expected results if:

• The units formed after the split prove to be unviable;
• No interested buyers are found for the divested assets.

Structural remedies are effective and justified when the following conditions are met:

• The source of the harm to competition is inextricably linked to the company's structure;
• There is a risk of prolonged or repeated violations;
• No behavioral remedy would have the same effect as the structural one;
• A behavioral remedy of comparable effectiveness would be more burdensome for the enterprise than a structural one.

One must also consider that, in certain circumstances, structural remedies may:

• Entail significant costs;
• Be difficult to administer;
• Require a long time to implement.

Another significant risk is the potential lack of proportionality between the measures and the violation. Structural remedies may be considered proportional when the harm to competition arises from the company’s structure—for example, in cases of vertical integration. Integration often gives dominant companies the opportunity and incentive to eliminate competitors through various discriminatory practices.

Deciding to issue a structural remedy is a complex task. Assessing the feasibility of a split requires considering many parameters that vary significantly based on:

• The industry in which the company operates;
• Market characteristics;
• Specific characteristics of the company.

In cases of abuse of a dominant position, structural remedies are used much less frequently than in merger controls. Even when applied, they are used sporadically and with maximum caution [7].

Unlike structural remedies, behavioral remedies focus on changing the way a dominant entity conducts its business. Depending on the involvement of third parties (e.g., other market participants) in their implementation, these measures are divided into two types:

• Internal, which do not affect third parties and concern only the internal management and organization of the Economic Entity (e.g., a requirement to adjust corporate governance provisions).
• External, which regulate the Economic Entity’s interaction with third parties. These may involve amending or terminating existing contracts, adjusting pricing schemes, etc.

FAS Remedy Options and Case Examples

Due to their individual nature, behavioral remedies allow antimonopoly authorities to adapt them to the specifics of a particular case, resulting in various forms.

For example, FAS Russia has issued remedies with the following conditions for transactions [8]:

• The obligation to renew or conclude contracts on non-discriminatory terms;
• Establishment of a maximum price level, markups, or margins for a specific period;
• The obligation to notify or clear price increases exceeding a certain value and provide justifications for the growth;
• The obligation to ensure the fulfillment of all concluded contracts;
• The obligation to refrain from further economic concentration transactions that could lead to exceeding a permissible market share;
• Ensuring the preservation of technological capacity for production and supply if there is demand and profitable production is possible;
• The obligation to develop trade, distribution, and pricing policies and notify the antimonopoly authority of changes;
• The obligation to provide the antimonopoly authority with information on the main business activity indicators of the company and its group;
• The obligation to operate on non-discriminatory terms (uniform pricing for all counterparties, equal access and terms for all counterparties, prohibition of unjustified refusals to contract, and public transparency);
• Ensuring the priority satisfaction of needs within the Russian domestic market [9].

For instance, after reviewing the application of Bayer AG to acquire more than 50% of the voting shares of Monsanto Company—which gave Bayer AG the rights to determine the business conditions of Monsanto Rus LLC—FAS Russia issued a remedy. Under this remedy, Bayer AG was required to conclude a civil law contract with the National Research University Higher School of Economics to organize a Technology Transfer Center. In this context, "transfer" meant either the full set or individual components of technology transfer, access to historical data, and the creation of a plant biotechnology research and education center. The center must manage the formation, technical and economic justification, selection, and implementation/support of projects aimed at developing competition in the Russian agro-technological sector [10].

While the antimonopoly authority may limit itself to a single behavioral remedy, in practice, a complex of additional legal measures is often applied to dominant entities. Furthermore, behavioral conditions are frequently used to supplement structural ones to ensure the latter are effectively implemented.

In Russian practice regarding abuse of dominance, behavioral remedies are applied more often than structural ones. However, their effectiveness is often questioned. This is because, unlike structural measures, behavioral remedies:

• Do not eliminate the Economic Entity’s ability to abuse its dominant position;
• Do not remove the incentives for such behavior.

Consequently, behavioral remedies do not solve the root problem—they do not limit the dominant entity’s potential for abuse.

A remedy may be appealed in court within three months of its issuance (Article 52 of the Law on Protection of Competition).

In Case No. A40-177809/2020, the applicants challenged a FAS Russia remedy and a clearance decision that was valid only in conjunction with that remedy. The remedy was issued due to "the potential restriction of competition in the retail markets for gasoline and diesel fuel following the transaction, as the LLC would increase its fixed production assets, requiring the vertically integrated group to increase its purchases of petroleum products on the commodity exchange, which would affect general market conditions". The cassation court agreed, stating that "the measures aimed at ensuring competition fully corresponded to the degree of change in the state of competition resulting from the transaction" [11].

Some court cases result in the invalidation of remedies. For example, in Case No. A40-187877/2018, applicants sought to invalidate a FAS Russia decision and its accompanying remedy. FAS Russia had argued that the "acquisition could lead to the restriction of competition in the specialized rolling stock market for grain transport". However, the courts found that the target company was not dominant and could not influence general market conditions. Thus, FAS Russia's arguments regarding restricted competition and price hikes were unfounded. The courts concluded that "the antimonopoly authority had no grounds to issue a remedy, and imposing those obligations placed the applicants in an unequal position compared to other Economic Entities in the market" [12].

Revision of FAS Remedies

Pursuant to Part 11, Article 33 of the Law on Protection of Competition, an issued remedy may be reviewed. Grounds for review include substantial circumstances arising after the remedy was issued that make its full or partial fulfillment impossible or impractical [13]:

• A change in the product or geographical boundaries of the commodity market;
• A change in the composition of sellers or buyers;
• The Economic Entity’s loss of its dominant position.

The list of grounds for reviewing economic concentration remedies is exhaustive and does not include provisions for changes based solely on market status or structure. In 2023, FAS Russia developed a bill to amend Part 11, Article 33 of the Law on Protection of Competition, proposing a new ground: "non-compliance of the price benchmarks specified in the remedy with the general conditions of product circulation in the market". The bill also proposed extending the review period for such applications to two months. However, this bill has not yet been passed.

A remedy may be reviewed regarding its content or the procedure for its fulfillment. The antimonopoly authority may review a remedy upon the application of the party (or group) to whom it was issued, or on its own initiative. A revision cannot worsen the position of the party to whom the remedy was issued.

An application to the antimonopoly authority must be submitted in writing in any form and signed by the applicant or their representative.

The application must contain:

• Information on the person (group of persons) to whom the remedy was issued;
• Information on the transaction or action that triggered the application or notification;
• A description of the circumstances that led to the issuance of the remedy;
• Details regarding the grounds for review.

Documents proving the grounds for review must be attached. If these cannot be provided, the applicant must state the reason and the person or authority that may possess them.

Commercial secrets, official secrets, or other legally protected secrets in the documents are not grounds for refusing to provide them to the antimonopoly authority. However, the applicant must specify the full list of documents containing such secrets.

All information in the application must be accurate. Attached documents must be originals or properly certified copies. An inventory of all submitted documents must be included.

The application and materials are sent to the antimonopoly authority via:

• Personal delivery;
• Courier delivery with a receipt;
• Registered mail with acknowledgment of receipt.

The application is considered submitted on the date of its registration. The antimonopoly authority reviews the application within one month of its registration.

Following the review, the antimonopoly authority decides either to:

• Grant the application and review the remedy; or
• Refuse the application.

A refusal decision is sent to the applicant within three days of its adoption.

When acting on its own initiative, the antimonopoly authority reviews a remedy within one month of becoming aware of the substantial circumstances.

Based on the review, the authority decides to:

• Cancel the remedy;
• Amend the remedy; or
• Supplement the remedy.

The decision must include conclusions on the grounds for the action, the specific provisions to be amended or supplemented, and the final content of those provisions. The decision is sent to the applicant in writing within three days of its adoption.

Consequences of Non-Compliance

Article 51 of the Law on Protection of Competition mandates that Economic Entities fulfill antimonopoly remedies within the established timeframe. FAS Russia monitors compliance. It is important to note that fulfillment means the complete implementation of all points in the remedy. Partial fulfillment is considered non-compliance and constitutes a violation of antimonopoly legislation, leading to administrative liability.

Non-compliance with a remedy, along with the failure to obtain preliminary consent, is an independent ground for a court to declare the corresponding transactions void.

Furthermore, non-compliance is grounds for administrative liability for legal entities and their officials under Part 2.3, Article 19.5 of the Code of Administrative Offenses of the Russian Federation (the "CAO RF").

Failure to fulfill a lawful decision or remedy to cease violations of non-discriminatory access rules or a remedy issued during economic concentration control results in an administrative fine:

• For officials: from 12,000 to 20,000 rubles or disqualification for up to three years;
• For legal entities: from 300,000 to 500,000 rubles.

In Case No. A40-50452/2021, a joint-stock company applied to FAS Russia for consent to acquire a 99.999% interest in an LLC. FAS Russia granted consent with a remedy requiring the company to notify FAS within 10 days of the acquisition and, by Q4 2020, to comply with Article 6 of Federal Law No. 36-FZ dated March 26, 2003, On the Peculiarities of the Functioning of the Electric Power Industry..., which prohibits combining electricity transmission with electricity sales. The company fulfilled only the notification part. Due to the failure to fulfill the remedy in full, FAS Russia issued an administrative violation protocol and a fine. The company challenged this in court.

The courts dismissed the company’s claims, finding a violation under Part 2.3, Article 19.5 of the CAO RF. They noted that Federal Law No. 36-FZ prohibits entities (and affiliates) in the same price zone from combining transmission and sales activities. The company's guilt was established [14].

Article 4.5 of the CAO RF provides that an administrative violation decision cannot be issued more than 60 days after the violation (or two months from discovery for continuing violations).

A continuing violation involves the long-term, uninterrupted failure to perform a legal duty. However, failure to fulfill a duty by a specific deadline set by a law or a non-normative act (such as a remedy) means the violation is not "continuing". It is considered completed the moment the deadline set by the remedy expires.

Part 7, Article 51 of the Law on Protection of Competition provides for continued compliance monitoring even after administrative liability has been imposed. If a defendant is fined for non-compliance, the commission, within five business days of the fine, issues an order setting new deadlines for the remedy’s fulfillment.

The antimonopoly authority’s application of these measures must be based on the circumstances of each case, following the principles of proportionality and effectiveness. The goal is to ensure competition and remedy the consequences of violations if they restricted competition.

If a remedy remains unfulfilled and administrative fines do not resolve the issue, the entity's actions may be reviewed for signs of abuse of dominance under Part 1, Article 10 of the Law on Protection of Competition. Alternatively, the antimonopoly authority may file a lawsuit to have the transaction declared void.

FAS Russia’s active use of behavioral and structural remedies as a preventive measure against anti-competitive effects serves both the state's interest in developing entrepreneurship and the interests of business. By analyzing economic concentration transactions and protecting competition, the authority ensures a healthy competitive market.

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References

[1] Kanuntseva M. Approving transactions with FAS Russia: what to look out for. Journal "EZh-Yurist", 2023, No. 21.

[2] FAS Russia Clarification dated June 11, 2021, No. 19 On the Peculiarities of State Antimonopoly Control over Economic Concentration, approved by the Protocol of the Presidium of FAS Russia dated June 11, 2021, No. 3.

[3] Ibid.

[4] Resolution of the Arbitration Court of the Moscow District dated July 9, 2019, in case No. A40-187877/2018.

[5] FAS Russia Clarification dated June 11, 2021, No. 19 On the Peculiarities of State Antimonopoly Control over Economic Concentration, approved by the Protocol of the Presidium of FAS Russia dated June 11, 2021, No. 3.

[6] Bryzhova E.M. Features of structural and behavioral remedies in cases of abuse of a dominant position in digital markets. Journal "Legal Science", 2023, No. 8.

[7] Ibid.

[8] Kanuntseva M. Approving transactions with FAS Russia: what to look out for. Journal "EZh-Yurist", 2023, No. 21.

[9] For example, FAS Russia Remedies No. TN/94331/2 dated October 13, 2022; No. TN/94337/22 dated October 13, 2022; No. TN/13912/23 dated February 28, 2023; No. NG/9727/22 dated February 10, 2022; No. TN/81191/21 dated September 24, 2021; No. VK/75153/21 dated September 6, 2021; No. PI/76750/21 dated September 10, 2021; No. GM/41221/23 dated May 26, 2023; No. TN/111081/24 dated December 3, 2024.

[10] FAS Russia Decision No. IA/28184/18 dated April 20, 2018.

[11] Resolution of the Arbitration Court of the Moscow District dated October 28, 2021, in case No. A40-177809/2020.

[12] Resolution of the Arbitration Court of the Moscow District dated July 9, 2019, in case No. A40-187877/2018.

[13] FAS Russia Order dated August 24, 2012, No. 544 On Approval of the Procedure for the Review of a Remedy Issued in Cases Established by Article 33 of Federal Law No. 135-FZ dated July 26, 2006, On Protection of Competition.

[14] Resolution of the Arbitration Court of the Moscow District dated December 16, 2021, in case No. A40-50452/21.