"Rules for Assessing the Objective Necessity and Efficiency of Abuse of Dominant Position"
On December 20th, 2024, the Cabinet of Ministers of the Republic of Azerbaijan has approved the "Rules for Assessing the Objective Necessity and Efficiency of Abuse of Dominant Position" (hereinafter “the Rules”).
The Rules establish the principles for assessing the objective necessity and efficiency of abuse of dominant position based on the Competition Code of the Republic of Azerbaijan.
Economic entities abusing their dominant position may file a petition for the assessment of the objective necessity and efficiency of their actions within 30 days from the date of the competition commission's decision to initiate proceedings. The acceptance of the petition submitted after the specified period will only be possible with the relevant decision of the competition commission.
The petition should specify the economic nature, subject, purpose, technical and economic characteristics of the acts of abuse, the scope of the related products, the geographical area in which it is applied, and the date of commencement. In addition, any other information that the economic entity deems necessary can also be included in the petition.
The justification of an economic entity regarding objective necessity or efficiency will be considered satisfactory if at least three of the following conditions are proven (excluding the simultaneous occurrence of conditions mentioned in Clauses 2 and 6):
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Achievingeconomiesofscalethroughtheabuseofadominantpositionand increasing the production of goods in the relevant market by at least 40% or exports by at least 20% within 1 year;
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Thepossibilityofproducinginnovativeproductsnotrelatedtotherelevantmarket through the abuse of a dominant position;
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An increase of 20% in direct investments (excluding funds allocated from the state budget) in the market within 1 year compared to the previous year through the abuse of a dominant position;
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Due to the limitations of technical capabilities, the economic entity in a dominant position is unable to operate under competitive conditions, making the production or sale of products impossible;
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In cases where there are specific quality and/or intellectual property rights criteria related to the production of the product, the production and sale of the product being inefficient without abusing a dominant position;
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Theexistenceofaknownsourceofinformationthattheopeningofasignificant resource for public use would lead to breaches of national security, consumer health, and public order;
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Theoccurrenceofabusecasesresultingfromtheimplementationofanexclusive supply system with a foreign economic entity during the import of a product that has high domestic demand and is not produced within the country.
According to the Rules the responsibility to justify and prove the objective necessity or efficiency of the abuse of dominant position lies with the economic entities. Moreover, the satisfactory assessment of the abuse of dominant position remains valid only as long as the conditions allowing for such an assessment are met.
