Antitrust Practices: Clearances, Unfair Competition, and Enforcement in Azerbaijan
1) What types of unfair competition are prohibited in your jurisdiction?
The legislation prohibits all forms of unfair competition, including aggressive conduct toward customers, imitation of a competitor’s business, dissemination of false information, and unlawful use of trade secrets. Violations also include deceptive advertising, interference with a competitor’s business relationships, and undue influence on their employees. Such actions may lead to legal liability.
2) What types of bid rigging exist, and how are they classified?
According to the Law of the Republic of Azerbaijan on Public Procurement, Informal negotiations and meetings between the procuring entity and suppliers are prohibited. No negotiations are allowed between the procuring entity and suppliers regarding the submitted proposals.
Horizontal and vertical agreements that restrict competition are also prohibited.
3) How do antitrust authorities detect and investigate cartels and anti-competitive agreements?
State control is exercised through the following methods by the competition authority:
- Investigations conducted by the competition authority.
- Inspections and audits.
These mechanisms ensure compliance with competition laws and prevent anti-competitive practices.
4) What measures can companies take to mitigate antitrust risks?
Companies can reduce antitrust risks by developing and implementing an internal compliance program for existing laws. It is important to regularly train employees on competition issues. Additionally, contracts and agreements should be carefully analyzed and assessed for potential competition violations. When entering into major transactions or partnerships, consulting with legal experts specializing in the relevant legislation is recommended. Implementing internal control systems and monitoring business processes helps prevent violations and minimize legal liability.
5) What are the specific rules governing undertakings with a dominant market position?
Under the current legislation, companies holding a dominant position in the market are required to comply with specific rules and obligations aimed at preventing abuse of their dominant market position. Such companies are subject to increased scrutiny by the competition authority, which has the right to conduct monitoring and investigations of their activities. These measures are designed to ensure fair and effective competition, prevent monopolistic pressure on the market, and protect the rights of other market participants. Failure to comply with these requirements may result in administrative sanctions and other enforcement actions.
6) What powers do antitrust authorities have when conducting inspections?
The competition authority conducts inspections of market entities in the following cases: upon detection of signs of violations of competition legislation; upon receipt of reliable information regarding such violations; when necessary during the consideration of a case; and for obtaining additional evidence during an investigation. During inspections, authorized officials have the right to examine premises, seal rooms containing equipment, review documents, and question representatives of the entities. The procedures and timelines for inspections are regulated by law and include both scheduled and unscheduled inspections. Failure to comply with requirements or obstruction of the inspection entails liability. Upon completion of the inspection, an act is drawn up based on which a decision is made regarding the presence or absence of violations. If violations are identified, a commission may be established to review the case or the possibility of voluntary elimination of the violations by the market entity may be considered.
Author: Fidan Vahabova, Senior Associate.