Participation in the formation of state policy in the field of antitrust and ensuring the implementation of that policy has been identified as one of the main activities of the Service.
According to Part II of Article 15 of the Constitution of the Republic of Azerbaijan, the Azerbaijani state creates conditions for the development of a socially oriented economy on the basis of market relations, guarantees free enterprise, prevents monopolies and unfair competition in economic relations.
Organizational and legal bases of prevention, restriction and elimination of monopolistic activity are defined by the Law of the Republic of Azerbaijan “On Antimonopoly activity”.
Monopoly activity is a form of monopoly, the activity of economic entities or executive authorities aimed at preventing, restricting or eliminating competition.
The dominant position
The dominant position is an exceptional situation that allows an economic entity to exert a decisive influence on competition based on the advantage of its economic potential, thereby making it difficult for other market participants to enter the market. An economic entity with a market share of more than 35% or more than the other limit established by law is considered to have a dominant position.
There are several types of monopolistic activities such as state monopoly, field monopoly, local monopoly, monopoly of economic entities, financial-credit monopoly, monopoly arising from horizontal and vertical agreements of market entities, patent-license monopoly and subsoil use monopoly.
These monopolistic activities are prohibited by the Law of the Republic of Azerbaijan “On Antimonopoly Activities” and the legislation provides for liability for such actions.
Cases on violation of antitrust law are considered in accordance with the "Rules for consideration of cases on violation of antitrust law" approved by the Cabinet of Ministers of the Republic of Azerbaijan dated May 29, 1998 No. 120.
According to the mentioned rules, the antimonopoly body shall consider the cases on violation of antimonopoly legislation on the basis of Appeals of market entities acting as legal entities and individuals, public organizations and other non-profit organizations, public legal entities, materials of relevant state bodies and information of periodical press. Cases of violation of antimonopoly legislation can also be considered on the initiative of the Antimonopoly authority.
Appeals on violation of antimonopoly legislation shall be submitted to the Antimonopoly body by submitting a written application, attaching the original documents confirming the fact of violation of antimonopoly legislation or duly certified copies of these documents. Documents prepared in a foreign language shall be submitted with their duly certified translation into the Azerbaijani language. The application on violation of antitrust law must contain information about the applicant and the complainant, an explanation of the fact of violation of antitrust law, the essence of the applicant's claims.
The Service conducts investigations on abuse of dominant position, elimination of cartel agreements, prevention of actions of local and central executive bodies that could limit competition and non-implementation of concentration in accordance with the requirements of antimonopoly legislation, works on the signs of violation of antimonopoly law and makes relevant decisions.
Antimonopoly regulation is carried out in the form of state control over the observance of antitrust legislation in the implementation of transactions concluded between economic entities during the establishment, reorganization and liquidation of economic entities and their associations and the acquisition of shares (stakes).
Creation, reorganization and liquidation of economic entities are carried out with the consent of the Service in the following cases:
- merger and acquisition of economic entities (if this results in the creation of economic entities with a share of more than 35% in the relevant commodity market);
- mergers and acquisitions of economic entities whose total value of assets exceeds 75,000 times the minimum wage;
- liquidation of state and municipal enterprises with the total value of assets exceeding 50,000 times the minimum wage (except for cases of liquidation of enterprises by court decision) and division (if this results in the creation of economic entities with a share of more than 35% in the relevant commodity market).
In addition, if the total book value of the assets of economic entities exceeds 75,000 times the minimum wage, (or) the share of one of the economic entities in the relevant commodity market is more than 35% or the acquiring entity controls the activities of the business entity alienating those shares, transactions concluded between business entities must be carried out with the consent of the Service in the following cases:
- when more than 20% of the voting shares (shares) constituting the authorized capital of one economic entity are acquired by another economic entity (association of economic entities or a group of persons controlling each other's property). These restrictions do not apply to the founders of an economic entity at the time of its establishment;
- when the transfer of fixed assets or intangible assets of one economic entity to the ownership or use of another economic entity (union of economic entities or a group of persons controlling each other's property), if the book value of the property constituting the subject of the transaction if the subject's fixed assets and intangible assets are more than 10 percent of the book value;
- when the rights of one economic entity to determine the conditions of entrepreneurial activity or to perform the functions of its supreme governing body are acquired by another economic entity (association of economic entities or a group of persons controlling each other's property).
The persons or business entities that make the decision to obtain the said approvals shall submit an application to the Service. The application shall be accompanied by the relevant agreement and (or) decision on the establishment, reorganization or liquidation of economic entities and information on the volume of sales of the main product (services) in the relevant commodity market.