Antitrust Practices: Clearances, Unfair Competition, and Enforcement in Armenia

1) What types of unfair competition are prohibited in your jurisdiction?

According to the current legislation of the Republic of Armenia, the following actions may, in particular, be considered as unfair competition:

1. Actions causing confusion with respect to an economic entity, its goods, or activities.

2. Actions related to the acquisition and use of exclusive rights to means of individualization, if such actions are aimed at ousting another entity from civil circulation.

3. Any actions of an economic entity involving the use of legally protected intellectual property rights without obtaining the appropriate authorization from the rights holder.

4. Actions that may discredit the activities of an economic entity.

5. Incorrect comparison of the activities of one economic entity with those of another.

6. Actions aimed at using or disclosing information protected by law or by contract as undisclosed information.

2) What types of bid rigging exist, and how are they classified?

The legislation of the Republic of Armenia distinguishes the following types of collusion:

• Horizontal agreement – an agreement between potential or actual competitors (economic entities) operating in the same market;
• Vertical agreement – an agreement between economic entities operating in the same product market but not being competitors;
• Other agreement – an agreement between economic entities operating in different product markets, which may lead to the prevention, restriction, or prohibition of competition.

In general, the law prohibits any concerted actions that directly or indirectly restrict competition, which also applies to collusion in tenders.

3) How do antitrust authorities detect and investigate cartels and anti-competitive agreements?

According to the current legislation of the Republic of Armenia, the competent authority responsible for ensuring healthy economic competition is the Competition Protection Commission. The grounds for initiating a case on violations in the field of economic competition include:

• Reports from individual or legal persons;
• Reports from state bodies or their officials;
• Identification of an obvious violation;
• Publication in the mass media of a fact constituting an obvious violation.

For the purpose of verifying the accuracy of the information provided, the Commission is authorized to carry out test purchases, observations, as well as monitoring with the aim of detecting relevant violations.

As a result of the proceedings, in which the Commission acts as an administrative body, the Commission is authorized to adopt an administrative act on the results of the inspection.

4) What measures can companies take to mitigate antitrust risks?

According to the legislation of the Republic of Armenia, the following provisions can be distinguished:

• Conclusion of anti-competitive agreements is prohibited;
• Rules of fair competition must be observed;
• Abuse of a dominant position in the market is prohibited;
• Transparency must be ensured in relations with state authorities and the Commission;
• Antimonopoly rules must be observed during the conduct of trade, auctions, and tenders;
• Concentration must be declared, and the Commission must be duly notified regarding transactions within a group of persons.

5) What are the specific rules governing undertakings with a dominant market position?

According to the legislation of the Republic of Armenia, abuse of a dominant position in the market is prohibited. In the event of repeated violations (two or more times within a year), the Commission has the right to adopt a decision on the demerger of the economic entity, which is subject to mandatory enforcement. The Commission is authorized to conduct investigations into cases of abuse, initiate proceedings, and adopt administrative acts based on their results. In addition, a special methodology is developed for entities, approved by the Commission, which allows for the determination of the existence of a dominant position.

6) What powers do antitrust authorities have when conducting inspections?

According to the applicable legislation of the Republic of Armenia, the antimonopoly authority is vested with the relevant powers to initiate and conduct proceedings in relation to violations in the field of economic competition, as well as to adopt administrative acts and to impose appropriate administrative liability in cases where infringements are established.

In addition, in exceptional circumstances, the Commission is empowered to unilaterally order the divestiture of dominant undertakings in the event of abuse of their market position, as well as to initiate judicial reorganization of such undertakings.

Authors: Hasmik Martirosyan (Counsel), David Karapetyan (Junior Lawyer).