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Analysis of competition and determination of boundaries of commodity markets. Article by publication

Analysis of competition and determination of boundaries of commodity markets. Article by publication

Table of contents

1. Goals and objectives defining the boundaries of the commodity market and analyzing the competition condition
2. Main stages of the analysis of the condition of competition
3. Determination of the boundaries of the commodity market
4. Indicators of assessing economic concentration of markets
5. Most common mistakes in determining the boundaries of commodity markets
List of references

Schedule 1. Kazakhstan. Analytical report on the analysis results of the market for transfer (provision) of a non-exclusive right to communicate (distribute) the package of TV channels (TV programs included in the program blocks) for general public
Schedule 2. Ireland. A decision on the case of fixing retail prices for motor fuel (extraction)
Schedule 3. The Netherlands. A decision on sugar producers merger
Schedule 4. Austria. Research of cement and transported concrete market
Schedule 5. New Zealand. A decision on merger of companies that provide funeral services
Schedule 6. Russia. Case - Museums (Case N A56-13710/2012)

The antitrust regulation is developed based on economic and legal concepts and approaches. At the same time, the "commodity market", as a legal concept refers to the basic and most significant categories in antitrust enforcement. As the Kazakh and foreign practices testify, borders of the commodity market where there was a violation of antitrust legislation are the most difficult for proving. For instance, almost every analysis of commodity market made by the antitrust body is appealed in courts in Kazakhstan, which resulted in determining the share of dominance by market entity with its subsequent inclusion in the Register of Dominants.

The issue of correct definition of commodity boundaries and analysis of competitive situation at commodity markets becomes more relevant in Kazakhstan in connection with the effectiveness of the Entrepreneurship Code of the Republic of Kazakhstan on 1 January 2016 (hereinafter - the EC RK), which replaced the Law of the Republic of Kazakhstan "On Competition" . At the same time, approaches to determining a dominant position of companies in the market were radically changed in the EC of the Republic of Kazakhstan. For instance, before 2016 the fact of having a dominant position in a certain commodity market was recognized only because a market entity controlled over the insignificant share of the commodity market (35% for unilateral dominance and 15% for collective dominance) exclusive of a number of important qualitative criteria that are mandatory for application. In accordance with new amendments to the EC RK, the proof of unilateral dominance began envisaging of greater strength and weight of economic analysis and behavioral practices of economic agents. Namely, these issues are included in the analysis of cases in this paper.

Along with examples of Kazakhstani practice, both authors provide in this work with practical cases from Russian practice. For example, professor Knyazeva I.V. from the Siberian Institute of Management RANEPA (Russian Academy of National Economy and Public Administration under the auspices of President of the Russian Federation) (Novosibirsk) described in the paper in addition to theoretical issues of market analysis practical cases, which she reviewed in the court proceedings in the courts of Russia.

Section 1 of the paper was prepared by Aitzhanov A.T., sections 3 and 4 –by Knyazeva I.V., and sections 2 and 5 were written by Aitzhanov A.T. together with Knyazeva I.V.

We hope that this work will be interesting for employees of the antimonopoly body, market entities and experts practicing in competition law, as well as students and teachers of economic and legal universities and departments.