Helen Saulnier 
A year of developing vital targets and flourishing advancement
The former calendar year was flourishing and fruitful for the advancement of levels of competition legislation in Kazakhstan. In accordance to the annual report of the Agency for the Safety and Growth of Level of competition of the Republic of Kazakhstan (the “Agency”) on the state of competitors and measures to restrict monopolistic exercise, there have been many superb achievements: the adoption of a regulation on the growth of competitiveness, and the effective dealing with of 10 scenarios with regards to barriers to the progress of competitiveness.
But now it is time to make a summary for 2022. What has occurred in one particular of Central Asia’s most progressive nations around the world this calendar year in phrases of competitors law?
Legislative trends and developments
This year in Kazakhstan has been entire of legislative amendments and initiatives relevant to level of competition laws.
The Regulation on introducing amendments and additions to some legislative functions of the Republic of Kazakhstan on the enhancement of competitiveness
Considering the fact that the beginning of 2022, the competition legislation had been amended by the Legislation dated January 3, 2022 “On introducing amendments and additions to some legislative functions of the Republic of Kazakhstan on the progress of competitiveness“.
The Law introduces the Crucial Services Doctrine into Kazakhstani regulation for the 1st time. According to the law, a vital capability is a item, an infrastructure item of a current market entity that occupies a dominant or monopoly position, with no accessibility to which other current market entities are not able to generate and (or) offer items on the relevant or similar products sector. A product or service or infrastructure can be regarded as a crucial capability less than a combination of person situations: it is inappropriate or difficult to replicate a product or infrastructure the proprietor reserves all legal rights to possession, use and disposal the proprietor has the capability to grant obtain the unjustified refusal of the operator to offer obtain will have a adverse effects on competitiveness there is no way to entry by means of exchange trading.
The introduction of the Crucial Facilities Doctrine was a single of the vital improvements all through the discussion of the draft Legislation. Traditionally and in European and US-American level of competition legislation, the Vital Facilities Doctrine has been used to denationalize the spheres of organic monopolies. In the circumstance of the use of the Critical Services Doctrine in marketplaces that are not linked to natural monopolies, the norm gets very corruptible and can be utilized in an unfair battle with competition.
In addition, the new regulation modified the concept of unfair levels of competition, and for this reason the regulator’s method to evaluating the relevant actions of market entities. If previously the listing of steps identified as unfair opposition consisted of 14 varieties and was exhaustive, now the listing is open up. Unfair competitors is any action of a current market entity (group of individuals) or many market place entities (group of people) aimed at obtaining pros in entrepreneurial routines that are contrary to the laws of the Republic of Kazakhstan, enterprise techniques, the needs of integrity, reasonableness and fairness and has triggered or may possibly result in injury to other people market place entities – rivals have both caused or may well induce harm to their enterprise popularity. As a result, in accordance to the improvements, any steps of a marketplace entity that brought on or may bring about problems or damage to the organization status of competitors, even if they are not furnished for by the Entrepreneurial Code of the Republic of Kazakhstan, can be identified by the regulator as unfair opposition.
Furthermore, the part of “soft regulation” stays and will keep on to be strengthened in Kazakhstan’s competitiveness coverage. At this time, regulatory resources involve observe, warning, and . Well timed detection of possible antitrust violations is surely helpful for all events: marketplace individuals, for whom the threat of being held liable is lowered, for the regulator and courts, the stress of investigating and examining scenarios is decreased. In get to popularize levels of competition legislation compliance, the Company supplies for the improvement of Methodological suggestions for the advancement and implementation of an interior act of opposition law compliance.
It should be mentioned that not all strategies of the regulator are reflected in the new legislation. The final edition of the Law did not contain, in unique, provisions regulating the digital economic climate because the wording proposed did not solve the meant jobs.
The Thought for the Defense and Development of Competition in the Republic of Kazakhstan
In the center of summertime, the President of the Republic of Kazakhstan accepted by Decree No. 938 the Thought for the Protection and Enhancement of Levels of competition in the Republic of Kazakhstan for 2022-2026 (the “Concept”). As element of the Principle, the Agency programs, amongst other items, to perform on reforming the existing procedures for obtaining the consent of the Company for mergers.
1st of all, it was pointed out that there is a continued large degree of condition participation in the economic system of Kazakhstan, the dominance of companies with point out participation in the most significant sectors of the financial system.
It also indicates the existence of problems affiliated with the asymmetry of facts – a scenario exactly where the provider of the items is aware of a lot more about its features, as effectively as about the available features on the market, than the purchaser. As a final result, uneven details creates limitations to the reorientation of demand from customers: it limitations the problems for entry into the suitable products current market for new participants, as well as the ability of consumers to look for for additional lucrative provides. The housing and communal services marketplaces can serve as an instance. What’s more, the asymmetry of data produces the conditions for the manifestation of unfair trade pricing practices based on the investigation of client behaviour and forces them to make an irrational selection.
In turn, the document outlines a eyesight for the growth of the spheres of defense and the progress of competitors. The Republic of Kazakhstan is centered on the transition from the punitive concentration of the condition plan on the defense and enhancement of level of competition to the development of a professional-aggressive atmosphere in the commodity marketplaces.
Sign-up for condition monopolies
On July 1, 2022, amendments to the Entrepreneurial Code came into force, giving for the generation of an institution of a particular regulation to oversee point out monopolies. The Agency for the Security and Progress of Levels of competition of the Republic of Kazakhstan fashioned and permitted the to start with point out sign up for topics of specific law and point out monopoly. This sign up consists of two sections, which includes 17 topics of specific regulation and 17 topics of state monopoly. In accordance with the Entrepreneurial Code, community and personal operators approved to put into action financial functions, provided in the sign-up of topics of unique law, are matter to level of competition regulation on the subsequent five concepts: price regulation, prohibition to have interaction in other functions, prohibition of participation in other legal entities, compensation for missing revenue to the business, a grace time period of six months to get ready industry participants.
In accordance with paragraph 3 of Write-up 193 of the Entrepreneurial Code, a point out organization, a joint-stock business, a restricted legal responsibility partnership could be the topic of a specific law. At the identical time, the Company, on an once-a-year basis, will evaluate the actions of individual subjects of a particular law in order to get ready proposals for the transfer to a competitive atmosphere of routines associated to the discipline of exclusive law. In this regard, the register of subjects of specific law will be additional altered.
Investigations of the Agency for Protection and Growth of Opposition of Kazakhstan
The Agency done outstandingly. In 2022 a number of levels of competition regulation investigations appreciably motivated the current market.
Marketplace for aggregators
The company, for example, investigated Yandex.Taxi for tariff setting. According to the Agency, Yandex. Taxi prices a commission of 17-20%, and also applies dynamic pricing – in negative climate, as well as on holiday seasons, visits are much a lot more high priced provided the amplified need. It accused Yandex.Taxi of creating a significant monopoly value, is prohibited by Short article 174 of the Entrepreneurial Code of Kazakhstan. According to paragraph 1 of Short article 175 of this Code, a superior monopoly cost of a item is the rate established by a market place entity that retains a dominant or monopoly position if this value exceeds the sum of charges and earnings demanded for the production and sale of these merchandise and the selling price formed in aggressive ailments on the corresponding or similar commodity market.
Whilst this investigation is nonetheless ongoing, in April 2022, Yandex.Taxi was fined by the Agency because of to the truth that the entity did not deliver the Agency with entire data relating to its corporate structure (in maintaining with the assessment of the company’s marketplace share) and the court reaffirmed the situation of the Company.
Sector for freight transportation
Yet another investigation specials with KTZ – Freight Transportation. Since March, an investigation has been underway on the foundation of abuse of a monopoly position in terms of implementing diverse selling prices to equivalent agreements, particularly the concluded settlement on the provision of distinctive tariff conditions for the transportation of items by railway in Kazakhstan. In accordance to the Company, KTZ – Freight Transportation gives rewards to its consumers in a aggressive current market, which potential customers to restricted opposition, offered that it occupies 95 for every cent of the current market.
There is no final conclusion as to the investigation, but as in the Yandex.Taxi illustration, KTZ- Freight Transportation already experienced to spend a wonderful in 2022 for not supplying data to the Agency in a well timed method. This final decision was subsequently sustained by the appeal instance.
All in all, 2022 was pretty progressive through the lens of Kazakhstani competitors regulation and there is a hope that this inclination will be further more strengthened.
