Monopolism to Undergo Changes in Azerbaijan

Business Materials 22 September 2008 17:15 (UTC +04:00)

Azerbaijan, Baku, 22 September / Trend corr. N.Ismayilova / "The Parliamentary Commission on economic issues does not support excessive rise of market share, because enterprise is considered an entity of monopolistic activity while its achievement," Ziyad Samadzade, the chairman of the commission, said.

Under the draft Competition Code, managing entities with 35% and more share at commodity market are considered monopolists, while holders with more than 25% of shares are monopolists at banking, insurance, leasing services and non-government pension insurance. Entities, which hold monopolistic positions, do not have the right to raise groundlessly prices of their products (services) in the case of scarcity, as well as to hamper competitive environment.

"This issue gives rise to many disputes. We continue to work in this direction, because any figure should be grounded. Therefore currently we are forecasting on a situation, how this limit may be - 35%, 40%, 50%, 55% or 60%, Samadzade said. Any figure should be grounded, whilst I do not support excessive rise of this stage of monopolism."

Azerbaijan is a small country and in this situation one company can turn out in condition to decide the fate of national economy.

"Therefore, at the first stage we should create excellently unbiased and optimal terms for this stage of development of national economy, the head of the commission said. Core of this law is to ensure justice of competition and to minimize any unhealthy and inefficient competition."

Antimonopoly state service at the Azerbaijani Ministry of Economic Development offered to increase shares of securities at the market, because its holder will become monopolist while it is achieved. Holder of more than 10% at the securities market is considered as monopolist at the draft law of the Code.

Changes may concern only the securities market and the ceiling will be offered on the base of analysis of the market.

Under the Competition Code, the country refuses to introduce register of monopolists, whilst there is a conception on terms that companies will be considered monopolist at the market.

However, the Code determines fields of natural monopolies, including oil and oil products transportation via main pipelines; services on transportation, distribution and supplying with natural gas; services on production, transmission and providing electricity and heat energy; services of main and local railways, exploration of road utilities and buildings, activity of management and security of traffic and railway stations; exploitation of motor highways and general roads, as well as other types of services.

The draft Competition Code will be reviewed at the autumn session of the parliament in third reading.

The document specifies legal bases to provide free and healthy competition, as well as protection in the field of entrepreneurial activity and regulates relations of managing entities functioning at goods and financial services market.

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