Overview of the amendments introduced to the Kazakhstan Competition Law by Kazakhstan Law "On Amendments to Certain Legislative Acts of the Republic of Kazakhstan Concerning Natural Monopolies and Regulated Markets" No. 312-V of 5 May 2015
- the amendments introduced new term "discriminatory conditions" meaning the conditions for access to a commodity market, production, exchange, consumption, purchase, sale and other transfer of commodities under which a market entity or a number of market entities are placed in a position of inequality in comparison with other market entity(ies); and
- the term "discriminatory conditions" replaced the term "discriminating conditions" throughout the whole text of the Law.
- the list of prohibited horizontal agreements was added with the agreements which entail or can entail the falsification of trading, auction or tender results, including the division into lots.
Anticompetitive concerted practices
- it is explicitly stated that the set of conditions set forth in Article 11.2 of the Law must be fulfilled by all participants of concerted practices undertaken by a market entity;
- the amendments changed the wording of one of the conditions subject to which practices may be recognized concerted as follows: actions of each of them are caused by actions of other market entities participating in concerted practices and are not the consequence of the events equally affecting all market entities in the respective commodity market.
Dominance and dominants
- the dominance of a certain market entity is determined in accordance with the Methodology for Market Analysis and Assessment of the Competition Environment in a Commodity Market approved by antitrust authorities (the previous version of the Law referred to the Methodology of the Eurasian Economic Commission); and
- when conducting an investigation with regard to an alleged abuse of the dominant or monopolistic position, antitrust authorities may identify the dominant or monopolistic position of a market entity in relation to which a complaint was received by analysing commodity markets, and apply antitrust response measures to such market entity for the entire period of its actual dominance.
Powers vested in antitrust authorities
- the previous version of the Law did not explicitly require that antitrust authorities disseminate information about the enforcement of the Kazakhstan antitrust law, while the new version of the Law explicitly provides for such requirement;
- the list of orders issued by antitrust authorities became open, while in the past it was closed;
- the new Law provides for the right/obligation to apply to enforcement agencies for special investigation means;
- the new Law provides for the right to circulate a caution on the impermissibility of certain action(s) which might entail violation of the Kazakhstan antitrust law (please see details below);
- the amendments provided for the function to approve the list of goods/works/services of regulated market undertakings subject to the state regulation of prices;
- the new Law provides for the right to determine the term of information disclosure which should be at least 5 business days; and
- the new Law provides for the right of investigators to examine any sites, premises (except for dwelling), documents and properties of the investigation subject either independently or together with the investigation subject, its representatives or other parties engaged by antitrust authorities for such investigation.
Caution on the impermissibility of the Kazakhstan antitrust law violation
- this is a new instrument which is intended to prevent any violation of the Kazakhstan antitrust law;
- such caution can be the result of a public announcement made by an officer of a market entity or central/local government authorities with regard to a certain market strategy which might entail violation of the Kazakhstan antitrust law, provided that there is no reason for official investigation;
- the decision to circulate such caution should be made by the chief executive officer of an antitrust agency within 10 business days after the date when such public announcement came to the knowledge of the antitrust agency; and
- the caution should set forth the grounds for circulation thereof and the provisions of the Kazakhstan antitrust law which might be violated.
- the amendments excluded the provision on the mandatory approval of the Methodology for Determination of the Commodity Substitution and Off-the-Shelf Availability Criteria, Market Boundaries, Market Research and Competition Environment Assessment depending on the specifics of commodities and Kazakhstan law regulating the respective sector of economy by antitrust authorities in consultation and coordination with the government agency regulating the respective domain of public administration (for financial institutions – in consultation and coordination with the Kazakhstan National Bank); and
- therefore, the market research will be regulated only by the Methodology for Market Analysis and Assessment of the Competition Environment in a Commodity Market approved by antitrust authorities.
- the amendments raised the threshold for purchase of voting shares/interests/equity units by a person/group of persons from 25% to 50%, whereas the purchase of voting shares/interests/equity units will not be deemed as economic concentration when a new legal entity is established (with respect to the founders of such legal entity);
- those transactions which are explicitly permitted by Kazakhstan laws, Presidential decrees and/or Government resolutions do not require antitrust authorities' consent to economic concentration; and
- the time period for review of an application for economic concentration consent was reduced from 50 to 30 calendar days after the application admission date.
- the amendments introduced the term "cartel" meaning the anticompetitive agreements or concerted practices between the market entities which compete or may compete in one commodity market set forth in Article 10.1 and Article 11.1 of the Law;
- cartel investigations may be performed without any prior notice to investigation subjects (cartel members), meaning that they will not be delivered a copy of the order to initiate the investigation 3 days in advance;
- the amendments regarding the investigation of an abuse of the dominant or monopolistic position are described above;
- certain provisions were brought into line with legislation (e.g. the obligation to issue the findings of a preliminary investigation of violation was abolished); and
- an investigation may be suspended when antitrust authorities decide to perform market research.
Administrative liability for anticompetitive agreements or anticompetitive concerted practices
- now those market entities which render assistance to antitrust authorities and voluntarily compensate customers for losses are exempt from any administrative liability, i.e. administrative penalties and forfeiture of monopolistic proceeds (Note: this amendment was introduced to Kazakhstan Code of Adminsitrative Offences No. 235-V of 5 July 2014).
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