On recognition as illegal and cancellation of the order to investigate violations in the field of competition protection
No. 6001-24-00-6ap/2959 dated April 22, 2025
Plaintiff: JSC "K" (hereinafter – the Company)
Respondent: Russian State Institution "Department of the Agency for Protection and Development of Competition of the Republic of Kazakhstan" (hereinafter – the Department)
The subject of the dispute: on the recognition as illegal and cancellation of the order dated December 21, 2023 "On the investigation of violations of the legislation of the Republic of Kazakhstan in the field of competition protection in relation to LLP "M" and JSC "K", regarding the investigation of JSC "K"
Review of the plaintiff's cassation complaint PLOT:
On December 21, 2023, the defendant issued an order "To investigate violations of the legislation of the Republic of Kazakhstan in the field of competition protection in relation to LLP "M" and JSC "K". The period under review is from January 1, 2022 to July 31, 2023.
The subject of the investigation was the establishment of factual data confirming or refuting the commission by the market entity of violations of the norms of subparagraph 1) paragraph 1 of Article 170 of the Entrepreneurial Code of the Republic of Kazakhstan (hereinafter referred to as the PC) in the market for the provision of cellular communications services.
The investigation was based on complaints from subscribers to the antimonopoly authority on December 20, 2023, about price increases for mobile communication services under tariff plans.
The plaintiff disputes the administrative act, arguing that the content of the authors of the complaints does not show signs of anticompetitive coordinated actions by operators, and therefore the complaints could not be the basis for launching an investigation; the analysis does not meet the requirements of the Methodology for analyzing the state of competition in commodity markets, approved by order of the Chairman of the Agency for Protection and Development of Competition of the Republic of Kazakhstan, dated May 3, 2022, No. 13; the contested order was issued without Notification of signs of violation of antimonopoly legislation.
Judicial acts:
1st instance: the claim was denied.
Appeal: the decision of the court of first instance remains unchanged.
Cassation: the decision of the appeal in this case is overturned.
The case has been sent for a new appeal hearing by a different panel of judges.
Conclusions: according to subparagraph 2) of paragraph 2 of Article 216 of the Criminal Code, the basis for initiating an investigation is the receipt by the antimonopoly authority of information on violations of the legislation of the Republic of Kazakhstan in the field of competition protection, an appeal from an individual and (or) a legal entity indicating signs of violation of the legislation of the Republic of Kazakhstan in the field of competition protection.
Thus, it follows from the contested order that the investigation was initiated on the basis of an appeal from an individual and (or) a legal entity indicating signs of violation of the legislation of the Republic of Kazakhstan in the field of competition protection.
However, the case file does not contain any appeals from
other subscribers of the Company, except citizens A.B. and G.E., on the basis of whose appeals, the defendant issued a notification dated November 20, 2023.
The specified notification on the elimination of violations under Article 170 of the PC was issued under two tariff plans "O" and "P" and was executed by the plaintiff.
According to the explanations of the cassator, as well as the Department's memo available in the case file, the contested investigation was initiated on the basis of information received from the plaintiff's websites about the announced tariff increases for 20 tariff plans, for which no notification was sent to the plaintiff.
If there are signs of unfair competition, abuse of a dominant or monopolistic position, with the exception of the signs specified in subparagraph 1) of Article 174 of this Code, anticompetitive coordinated actions of market entities, the antimonopoly authority, by virtue of the requirements of paragraph 1 of Article 199 of the PC, shall send a notification to the market entity on the presence in actions (inaction) of signs of violation of the legislation of the Republic of Kazakhstan in the field of protection competition without conducting an investigation.
The notification is sent no later than ten working days from the date when the antimonopoly authority became aware of the presence of these signs.
The antimonopoly authority shall decide to conduct an investigation if the market entity has not terminated the actions (inaction) specified in the notification within the time limits established by paragraph 2-1 of this Article.
The contested order initiated the investigation under subparagraph
1) paragraph 1 of Article 170 of the Criminal Code on the grounds of violations expressed in the establishment and (or) maintenance of prices or other conditions for the purchase or sale of goods, which precludes the initiation of an investigation without notification.
In addition, it should be noted that the Law of the Republic of Kazakhstan dated October 30, 2024 No. 133-VIII SAM ratified the Agreement between the Government of the Republic of Kazakhstan and the Government of the State of Qatar signed in Doha on March 20, 2024 on the establishment of a long-term strategic partnership for the development of projects in priority sectors.
According to paragraphs 2.3 and 2.3.5 of the Agreement, the Government of the Republic of Kazakhstan guarantees and agrees that it, as well as the state bodies of the Republic of Kazakhstan, will not take any actions that may lead directly or indirectly to any of the following actions, namely, conducting antimonopoly or other investigations, as a result of which measures related to tariff regulation or the introduction of any requirements, limits and/or restrictions regarding the quality of communication and connection, Internet speed, which will have a significant negative impact on
the activity of "M" LLP until December 31, 2026.
The local courts have not given a proper legal assessment to these circumstances, the plaintiff's arguments set out in the claim and appeal have not been verified, the grounds for initiating an investigation procedure have not been properly investigated, and the necessary documents have not been attached to the case file.
Upon a new review, the court of appeal should eliminate these shortcomings and consider the claim in full, ensuring the protection of the rights of the persons involved in the case, and, depending on the established, in accordance with the norms of substantive and procedural law, decide on a lawful and reasonable judicial act.
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