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

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

In accordance with Article 21 of the Law of the Republic of Uzbekistan No.ZRU-850 dated July 3, 2023 “On Competition”, the implementation of unfair competition by business entities or other persons acting in their interests in relation to competitors is prohibited, including the following actions:

• Discrediting a competitor, i.e., dissemination of false, inaccurate, or distorted information about the quality and consumer properties of goods offered for sale, methods and conditions of production and use of such goods, expected results from their use, suitability of the goods for certain purposes, or conditions of offering goods for sale, including their price, which may negatively affect the activities of a competing business entity or damage its business reputation;
• Incorrect comparison, i.e., comparison of a competing business entity or its goods using words or symbols that create an impression of superiority of the goods without indicating their characteristics or parameters of comparison supported by objective evidence;
• Misleading consumers regarding the nature, method, and place of production, consumer properties of the goods, their price and quality, or the manufacturer’s (contractor’s) warranty obligations;
• Obtaining, using, or disclosing trade secrets or other legally protected secrets, including scientific, technical, production, or commercial information, without the consent of its owner;
• Carrying out actions leading to blocking access to the goods or financial market for a competing business entity or to its elimination from the market.

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

In Uzbekistan, bid rigging is considered as a form of anti-competitive agreement under Article 19 of the Law on Competition. Such agreements include collusion to artificially increase, decrease, or maintain prices in tenders, auctions, and other types of trading. They also cover actions such as market division, limiting access to markets, or imposing unfair contract conditions. Bid rigging may occur both between competing and non-competing business entities, as well as with the involvement of associations or state authorities, if it restricts competition or harms consumers. These agreements are prohibited and deemed void unless they are aimed at improving production, innovation, or overall economic growth.

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

The Competition Development and Consumer Protection Committee of the Republic of Uzbekistan identifies and investigates cartels and anti-competitive agreements using various tools. First, they analyze market information, pricing, and the behavior of market participants to detect signs of coordinated actions. The antitrust authority is entitled to conduct inspections, request documents, electronic data, and explanations from business entities. Should the existence of anti-competitive agreements be confirmed, enforcement proceedings shall be initiated, administrative fines may be imposed, and additional remedial measures may be undertaken, including the referral of relevant materials to law enforcement agencies.

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

Companies can significantly reduce antitrust risks by implementing compliance systems and internal control mechanisms. It is recommended to establish clear internal rules for interactions with competitors, counterparties, and government authorities. To prevent violations, companies should conduct legal reviews of transactions and consult with lawyers before entering into major agreements. Another effective measure is carrying out internal audits and monitoring to timely identify and eliminate potential violations.

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

According to Article 18 of the Law on Competition, abuse of a dominant position or superior bargaining power is prohibited. Such abuse is recognized when actions of an entity or group of entities ultimately lead to restriction of competition and/or infringement of the rights and legitimate interests of consumers and other market participants. A number of actions, including reducing the circulation of goods with the purpose of creating or maintaining a deficit in the commodities or financial market, infringing consumers’ rights to purchase goods in the necessary volume and of proper quality, establishing monopolistically high or monopolistically low prices, imposing discriminatory conditions for the sale and purchase of goods, prohibiting or restricting the circulation of goods produced by competitors, etc. are prohibited.

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

The Competition Development and Consumer Protection Committee of the Republic of Uzbekistan is vested with broad powers when conducting inspections. They are entitled to request documents, explanations, and other necessary information from business entities and state authorities. They are also authorized to obtain copies of documents and electronic data, and, if necessary, engage experts and specialists. In the event of identifying violations of competition legislation, the antitrust authority shall initiate and conduct proceedings in respect thereof and, based on the results of such proceedings, shall issue a decision aimed at restoring competition and remedying the violations of competition law, including, where applicable, the voluntary return of unlawfully obtained income by economic entities.

Authors: 

Mukhammadaziz Omonjonov, Associate

Anora Turakhujaeva, Counsel