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Competitive law of the Republic of Kazakhstan: Textbook

Competitive law of the Republic of Kazakhstan: Textbook

Table of contents

Foreword
Chapter 1. Competition and need in its state regulation
1.1 Competition and Monopoly. Market types
1.2 Transformation of the nature of competition in modern markets
1.3 Evolution of the system of state regulation of competitive processes and monopoly trends within the framework of competition law
Issues for discussion

Chapter 2. Concept and subjects to competition law
2.1. The concept of competition law
2.2. Subjects of competition law
2.3. History and dynamics of competence of the antitrust body of the Republic of Kazakhstan
Issues for discussion
Chapter 3. Defining borders of the commodity market and analyzing competitive situation
3.1. Main stages of methodology for analyzing the competitive situation
3.2. Determining the boundaries of the commodity market
Issues for discussion
Chapter 4. Regulation of the activity of state companies and agencies by antitrust legislation
4.1. Grounds for participation of the state in business activities
4.2. Getting permission of the antitrust authority for establishing state enterprises and legal entities, over fifty percent of shares (equity shares) of which are state-owned
4.3. Prohibitions on the performance of anti-competitive actions and agreements by authorities
Issues for discussion
Chapter 5. Government control over economic concentration
5.1. The nature of mergers and regulatory framework for controlling economic concentration abroad
5.2. Implementation of antimonopoly control of economic concentration in Kazakhstan
Issues for discussion
Chapter 6. Abuse of dominance…
6.1. Economic and legal nature of "dominant position" category and its types
6.2. Methods, forms and types of abuse of dominant position in the world practice
6.3. Abuse of dominant or monopolistic position: the concept and types in the legislation of the Republic of Kazakhstan
Issues for discussion
Chapter 7. Anti-competitive agreements and collusions
7.1. Characteristics and types of horizontal and vertical agreements
7.2. Antitrust regulation of anticompetitive agreements in the Republic of Kazakhstan
7.3. Prohibitions on anticompetitive collusions in the antitrust legislation of the Republic of Kazakhstan
Issues for discussion
Chapter 8. Unfair competition
8.1. Unfair competition in world practice and methods of its elimination
8.2. Legislative regulation of unfair competition and its law enforcement practice in the Republic of Kazakhstan
Issues for discussion
Chapter 9. Investigation and responsibility for violations of antitrust legislation
9.1. Investigation of antitrust law violations
9.2. Caution about inadmissibility of violations and notification on elimination of signs of violations
9.3. Legal responsibility in the antimonopoly area
9.4. Administrative responsibility for monopolistic activities
Issues for discussion


Appendices

List of references

Authoring team

1) Aitzhanov Aldash Turdykulovich, PhD in Economics, MSc in Public Policy (UCL) - introduction, Ch. 3 (3.1 together with Knyazeva I.V.), Ch. 6 (6.1 and 6.3), Ch. 7 (7.2 and 7.3), Ch. 9 (9.1, 9.2, and 9.4.);

2) Bablanov Tleuberdi Kadessovich, PhD in Economics - Ch.4 (4.1 co-authored with N.V. Radostovets);

3) Nurseyit Abbasatarovich Bayzhanov, PhD in Law - Ch. 2 (2.1 and 2.2.);

4) Knyazeva Irina Vladimirovna, Doctor of Economics, Professor - Ch. 1, Ch. 3 (3.1 together with Aitzhanov A.T., 3.2.), Ch. 5 (5.1.), Ch. 6 (6.2.), Ch. 7 (7.1.), Ch.8 (8.1.);

5) Makysh Serik Bikhanovich, Doctor of Economics, Professor - Ch. 5 (5.2 in co-authorship with Kholtursunov K.D.);

6) Parsegov Boris Anatolievich - Ch. 2 (2.3.);

7) Primazhev Nurzada Makhanbetovich, PhD in  Law, Associate Professor - Ch. 9 (9.3.);

8) Nikolay Vladimirovich Radostovets, Doctor of Economics - Ch. 4 (4.1 together with Bablanov T.K., 4.2 and 4.3 together with Kholtursunov K.D.);

9) Kholtursunov Kuanysh Jalilovich - Ch. 4 (4.2 and 4.3 together with Radostovets N.V.), Ch. 5 (5.2 together with Makysh S.B.), Ch.8 (8.2.).

Foreword

Competition law is one of the youngest branches of law, but its value cannot be overestimated. Regulation and protection of competitive relations, which is the objective of competition law, is very much in demand in modern society. The head of state N.A. Nazarbayev, rightly noted at one time "if there is no competition, one sleeps better, but lives worse".

The government protecting freedom of economic activity of market players protects and develops competition. In practice, the antitrust authority traditionally implements this function of the state.

This training manual was prepared and published by the Center for Competition Policy  Development and Protection1 (hereinafter referred to as the Center), at the request of the antitrust body of the Republic of Kazakhstan - the Committee for Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan (hereinafter the CRNMPC)2.
The authors’ team has worked on the manual consisting of experienced practitioners who have defended competition for a number of years under the auspices of the antimonopoly body, as well as recognized experts working both in the academic environment and in private consulting.

The work on the manual coincided with a period of serious reforms of the Kazakhstani competition law. We are talking about the transformation of the norms of law "On competition" in 2008 (hereinafter - the Law) into an independent chapter in the Entrepreneurship Code of the Republic of Kazakhstan (hereinafter - EC RK). At the same time, part of the team was directly involved in the development of the Law, as well as in the development of a chapter "Economic Competition" of the EC RK.

With the effectiveness of the EC RK from January 1, 2016, the Law "On Competition" will be invalid; thereby the status of Kazakhstan competition law will rise to the level of the Code. Keeping this in mind, the manual presented primarily contains analysis of those rules of competition law that were included in the EC RK. At the same time, they are constantly correlated with the requirements specified in the Law on Competition and applied in practice from January 1, 2009 to December 31, 2015.

It is important to note that despite almost complete transfer of the Law on Competition 2008 to the Entrepreneurship Code as a separate chapter, the content of the Law was significantly amended. It was related, first, to initiative of deputies of the Mazhilis of the Parliament and members of a working group drafting the Entrepreneurial Code, and, second, to a number of new developments in legislation prepared by the Government of Kazakhstan in the framework of the implementation of the 53rd step of the strategy "The Nation's plan - 100 concrete Steps to Implement Five Institutional Reforms " by N.A. Nazarbayev. The previously mentioned step 53 provides for changing a concept of the activity of the antitrust service and aligning it with standards of the Organization for Economic Cooperation and Development (OECD).

It is noteworthy that OECD made a “Review of the antitrust legislation and policy of the Republic of Kazakhstan” (hereinafter referred to as the Review) performed by A.Yu. Ivanov, Director of the Institute of Law and Development of Higher School of Economics – Skolkovo (Moscow). This Review was discussed at the OECD Global Competition Forum on October 29, 2015 in Paris.

Another important event took place in August. Initiated by and with the direct participation of the CRNMPC and Center for Competition Policy Development and Protection a Chair of Antitrust Regulation was inaugurated at the Eurasian National University by L.N. Gumilev.

It is gratifying to note that the CRNMPC adopts positive experience of its Russian colleagues in this work, who take active participation in the opening of such chairs at universities and writing textbooks. Thus, chairs engaged in antitrust regulation or competition law issues are functioning in Russia in more than ten universities, and a number of educational materials were published or republished. For instance, the 5th edition of a textbook written by I.V. Knyazeva “Antitrust policy in Russia” was published in 2011, the 2nd edition of a textbook “Competitive law of Russia” was published in 2014 edited by employees of the Federal Antitrust  Service of the Russian Federation I.Yu. Artemyev, S.A. Puzyrevsky and A.G. Sushkevich. Materials of these manuals along with other works were used also in preparing this training course. Moreover, one the authors of the above textbook A.G. Sushkevich has greatly assisted in the preparation of this training manual providing a number of valuable recommendations, and professor I.V. Knyazeva joined the authoring team and took active part in writing relevant sections. We would like to express our special gratitude for this.

The presented guidelines “Competitive Law of the Republic of Kazakhstan” is one of the first in the country training courses aimed at familiarization and explanation of the antitrust regulation system in Kazakhstan. So far only one textbook “Antimonopoly policy of the state” was published in Kazakhstan, prepared and edited in 2014 by I.V. Knyazeva and E.S. Permyakova for methodological support of a subject for specialization in Antitrust Policy of the State taught at the East Kazakhstan State Technical University by D. Serikbayev (Ust-Kamenogorsk). At the same time its edition was very limited, and material itself was intended only for internal use at the university. We can also mention here papers by N.V. Radostovets “Antitrust policy in Kazakhstan” (1994), and A.Zh. Bikebayev “Competitive (antitrust) law and policy of the Republic of Kazakhstan” (2010). Despite the fact that they are not training courses works of the above authors are one of the meaningful woks on studying issues of various stages in the formation and development of competitive policy and law in Kazakhstan.

This manual outlines main topics and issues of the competitive law of the Republic of Kazakhstan. At the same time given the fact that competitive law is at the junction of jurisprudence and economics the manual focuses on functioning of markets, nature of competition and other economic aspects of the antimonopoly regulation.

We hope that the prepared training manual will be useful for students, PhD students, teachers of economic and legal universities and departments, employees of legal and economic services, market players and young employees of the Antitrust Body - in other words, for anyone who wants to improve their knowledge in competition law.

The authors will be grateful for any substantiated comments and suggestions for further improvement of this training manual and are ready for their open discussion. 


The Center established with the Resolution of the Government of the Republic of Kazakhstan in 2008 currently is a non-governmental independent company specializing in issues on competition policy and antitrust regulation. The Center employs staff consisting of 6 Doctors and PhDs in Economics and Law, 3of whom have also extensive practical experience in the Kazakhstan antitrust authorities system.
2 This textbook with prepared following results of the open electronic bid № 815382 carried out by the Committee for Regulation of Natural Monopolies and Competition Protection of the Ministry of National Economy of the Republic of Kazakhstan in September 2015.


Editor in chief: Aitzhanov A.T.,
PhD in Economics, MSc in Public Policy (UCL),
Deputy Head of the Chair
«Economic theory and antitrust regulation» of
the Eurasian National University by L.N. Gumilev,
President of JSC Center for Competition Policy Development and Protection