Anti-Competitive Concerted Actions of Market Entities

During the review of judicial acts (appeals against orders approving conclusions based on the results of conducted investigations, issued prescriptions, orders appointing investigations, etc.), it was established that practically the only type of anti-competitive concerted actions encountered is the establishment and maintenance of prices or other conditions for the purchase or sale of goods (subparagraph 1) of paragraph 1 of Article 170 of the Entrepreneurial Code).

According to paragraph 2 of Article 170 of the Entrepreneurial Code, actions may be recognized as concerted if they simultaneously meet the following conditions:

1. such actions restrict competition;

2. the result of such actions corresponds to the interests of each of the market entities;

3. the actions of market entities are known in advance to each of them due to a public statement made by one of them or the public placement of information by one of them about the performance of such actions;

4. the actions of each of the specified market entities are caused by the actions of other market entities participating in the concerted actions;

5. the actions of market entities are not the result of circumstances that equally affect these entities (changes in the tax and other legislation of the Republic of Kazakhstan, consumption dynamics, tariffs for services of natural monopoly entities, prices for raw materials and goods used in the production and sale of goods);

6. the combined share of the market entities in the relevant commodity market is 35 percent or more. At the same time, the minimum share of one market entity in the relevant commodity market must be 5 percent or more.

Consideration of court cases related to anti-competitive concerted actions has shown that courts generally correctly focus on compliance with the six conditions mentioned above.

In claims filed by LLPs (No. 5594-22-00-4/640), LLP (No. 5594-22-00-4/544), LLP (No. 6001-22-00-6ap/2469), and LLP (No. 7194-22-00-4/1453), local courts reasonably established the absence of the cumulative conditions necessary to conclude that anti-competitive concerted actions had taken place.

At the same time, in the claim filed by LLP and LLP (No. 6001-23-00-6ap/494), the local courts refused to satisfy the claims on the grounds that the analysis conducted by the Antimonopoly Authority was lawful, since the market boundaries and the time interval were determined reasonably, and the actions of the investigation subjects contained signs of anti-competitive concerted actions.

However, the Judicial Panel for Administrative Cases of the Supreme Court did not agree with the decisions of the local courts and concluded that the Antimonopoly Authority had not examined the issue of determining the market boundaries, since such data were absent in the analysis. Therefore, it was also impossible to provide an appropriate assessment of the state of the competitive environment in the commodity market. In other words, there was no information confirming the market shares of the investigated market entities.

REGULATORY SOURCES AND ABBREVIATIONS

The main regulatory legal acts that courts should rely on when considering cases related to the application of antimonopoly legislation are:

• The Constitution of the Republic of Kazakhstan of August 30, 1995;

• The Entrepreneurial Code of the Republic of Kazakhstan of October 29, 2015 (EC);

• The Administrative Procedural and Procedural Code of the Republic of Kazakhstan of June 29, 2020 No. 350-VI (APPC);

• The Code of the Republic of Kazakhstan on Administrative Offenses of July 5, 2014 No. 235-V (CAO);

• The Law of the Republic of Kazakhstan “On Natural Monopolies” of December 27, 2018 No. 204-VI (Law);

• The Judicial Panel for Administrative Cases of the Supreme Court of the Republic of Kazakhstan (JPAC SC);

• The Agency for Protection and Development of Competition of the Republic of Kazakhstan and its territorial bodies (antimonopoly authority);

• The Committee for Regulation of Natural Monopolies of the Ministry of National Economy of the Republic of Kazakhstan and its territorial bodies (authorized body for the regulation of natural monopolies).

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