Ukraine's Antimonopoly Committee to continue investigating Western Union Financial Services on suspicion of operating as a monopoly in Ukraine
Ukraine’s Antimonopoly Committee says it will continue investigating Western Union Financial Services on
suspicion of operating as a monopoly in Ukraine, despite the firm’s recent decision to reduce the cost of money transfer services between Russia and Ukraine.
At a Sept. 21 press conference, Antimonopoly Committee head Oleksiy Kostusev called Western Union’s Sept. 6 decision to lower rates for some of its services a “victory,” but said the company must reduce rates for transfers between Ukraine and other countries, or face fines.
“Western Union’s decision to reduce tariffs for transfers from Russia to Ukraine by [60 percent] is viewed by the Antimonopoly Committee as a victory,” Kostusev said, adding that the reduction of rates will allow Ukrainians to send more of the money they earn in Russia to relatives in Ukraine. Currently more than 3 million Ukrainians work in Russia, mostly in the construction and energy industries; 93 percent of wire transfers made between Ukraine and Russia go from Russia to Ukraine, he added.
For every $100 transferred between Ukraine and most other countries, Western Union previously charged about $15. However, the company reduced this fee between Russia and Ukraine in early September to $6; transfers of $200 now cost $9. Transfers of larger sums also imply additional savings.
Kostusev, who was not placated by the company’s recent reduction in fees, vowed that he would persuade Western Union to lower rates for money transfers made to Ukraine from other countries, too, or face hefty fines.
Ukrainian legislation allows the committee to fine violators for up to 10 percent of their turnover.
“[Western Union] controls 85 percent of the market, transferring about $2 million in and out of Ukraine daily,” he said Sept. 21.
The Antimonopoly Committee began a probe into Western Union in March, on the grounds that the company may have been abusing its monopoly position on the market to keep the cost of wire transfer services artificially high.
In a statement issued June 1, the committee said its investigation into Western Union was triggered by an appeal from the National Bank of Ukraine. The committee also suspects Western Union of using its monopoly to hinder other operators from entering Ukraine’s money transfer market.
“The investigation is in its final stages,” Kostusev said. “The committee is awaiting responses to additional questions from Western Union’s head offices… then the committee will hold an open session, during which a final decision may be made in this case.”
Peter Hnatiuk, regional director of the representative offices of Western Union Financial Services, said his company is cooperating with the committee and providing it with all requested information. He added that his company lowered its tariffs to satisfy customers, not to satisfy Ukraine’s Antimonopoly Committee.
“The decision to reduce tariffs between Ukraine and Russia had no connection with their investigation,” Hnatiuk said. “We try to do everything to keep our clients happy.”
Hnatiuk did not rule out the possibility that Western Union would review its pricing policy for money transfer services between Ukraine and other countries in order to provide the best value for Ukrainian customers.
“This is a competitive market,” he said. “We are constantly reviewing our pricing policies and operations to improve the services that we offer to our customers.”
Responding to accusations from the Antimonopoly Committee that Western Union requires Ukrainian banks to sign exclusivity agreements, Hnatiuk said that it’s “common international business practice” to have “exclusive relationships” between different parties.
