1. What is unfair competition?
Unfair competition refers to actions aimed at gaining an advantage in the entrepreneurial activities of a market participant through unfair means, contrary to existing legislation, thereby harming other market participants (competitors), or damaging their business reputation.
2. What activities lead to unfair competition?
- Imitation of economic activity:
- Imitating a competitor’s goods, including their shape, packaging, and external design (except for appearance resulting from technical properties);
- Direct reproduction of a product in violation of patent and licensing rights;
- Illegal use of trademarks, geographical indications, company names, and other distinguishing marks (except in cases where an entity with the same name uses its name as a company name with a distinguishing mark).
- Discrediting economic activity:
- Dissemination of false or distorted information about a business’s reputation or financial status;
- Misrepresentation of scientific, technical, or production capabilities.
- Interference with economic activity:
- Deliberate violation, disruption, or termination of business relations through illegal means;
- Influencing employees of a business entity by illegal means to prevent them from fulfilling their duties.
- Unfair business activity:
- Illegal acquisition, use, or dissemination of scientific, technical, production or trade information, including trade secrets;
- Influencing the adoption and implementation of economic decisions by illegal means to gain an unjustified advantage;
- Sale of products with mandatory additional assortment;
- Provision of unjustified unilateral advantages in contracts;
- Withholding goods from circulation until the day when their prices are to be increased or to artificially create conditions for price increases.
- Unfair business conduct:
- Breach of a non-compete agreement that does not create serious restrictions on the economic activity of market participants;
- Making baseless calls to disrupt business relations with other market participants or to prevent the establishment of such relations;
- Cases of consumer confusion:
- Use of information that misleads consumers about the origin, preparation, suitability, quality and other properties of goods, or the identity and other information of the entrepreneur;
- Use of misleading advertising that impacts consumer freedom of choice within purchase or deal;
- Misuse of trademarks or distinguishing marks to confuse consumers;
- Concealing the unsuitability of goods for their intended use;
- Misrepresenting products in advertising or informational materials.
3. What is the role of the State Service for Antimonopoly and Consumer Market Control in addressing unfair competition?
The State Service for Antimonopoly and Consumer Market Control takes actions to prevent, limit, and eliminate unfair competition, including:
- Investigating cases of unfair business practices;
- Detecting and eliminating cases of unfair competition among market participants;
- Prosecuting individuals who violate antimonopoly legislation.
4. Who can report cases of unfair competition to the State Service?
- Market participants (legal and physical persons);
- Executive authorities and management bodies;
- Social organizations and other non-profit organizations;
- Public legal entities.
The State Service can also initiate investigations based on its own findings, information from relevant state bodies, or reports from the press.
5. What documents should be submitted when applying to the State Service?
- Electronically via the "Application, complaint, proposal" subsection of the "Application" section on the official website: www.competition.gov.az (https://competition.gov.az/az/page/muraciet/erize-sikayet-teklif);
- Email: Send the necessary documents to the email address: office@competition.gov.az;
- In person: Visit the State Service at the following address: Baku, Sabail District, Uzeyir Hajibeyov Street 84, Government House, Gate 7.
It is recommended that you contact the 195-1 Call Center regarding the questions that have arisen.
When applying in writing, submit the following documents:
- Application: Include details about the applicant and the person complained about, explain the fact of unfair competition, and state the applicant's demands;
- Supporting documents: Original or certified copies confirming the violation.
Note: Documents in foreign languages must be submitted with a certified translation into Azerbaijani.
6. What is the responsibility of business entities that have committed unfair competition?
- A financial sanction of one time the income (excluding VAT, simplified, and excise taxes) from the goods or services sold through unfair competition. If the action is repeated in the following year, the sanction increases to two times the income. This applies to actions such as imitation of economic activity of the competitor, i.e., imitation of competitors' goods, direct reproduction of products in violation of patent rights, or illegal use of trademarks, geographical indications, company names, an
- A financial sanction of up to 10% of the income (excluding VAT, simplified, and excise taxes) from the goods or services sold with unfair competition against market subjects. This increases to 20% if the action is repeated within the following year. This applies to actions such as discrediting competitors, interfering with economic activities, engaging in unfair business activities and unfair business conduct, and confusing customers.
- A financial sanction of up to 10% of the total income (excluding VAT, simplified, and excise taxes) from all activities over the last three months for failure to comply with or timely fulfill the mandatory instructions from the central executive authority implementing antimonopoly policy.
- A financial sanction of up to 5% of the total income (excluding VAT, simplified, and excise taxes) from all activities over the last three months for providing incorrect or incomplete information to the central executive authority implementing antimonopoly policy.