UNIT SEVEN

COMBATING UNFAIR COMPETITION

In Russia, unfair competition is prohibited by law. The very notion of
Unfair competition includes the following components: spreading false,
Inaccurate or distorted information capable of damaging the financial
interests or reputation of another economic structure.

It is also against the law to mislead consumers about the nature, methods
and place of production, the consumer properties and quality of a
commodity. Besides, the relevant law covers such vital issues as the
protection of commercial secrets and intellectual property. So, several years
ago there was set up a federal antimonopoly body.

While promoting the development of market relations, the federal
antimonopoly body takes steps against unfair competition. It can give orders,
obligatory for execution, to transactor units on their termination of
breaches of the antimonopoly legislation.

The federal antimonopoly body gels a lot of support from its territorial
agencies which have a direct access to the executive and governmental
bodies of the subjects of the Russian Federation. These bodies are able to
respond promptly and efficiently to any actions leading to unfair
competition. But it is the federal anti-monopoly body that submits to the
government proposals for improving antimonopoly legislation and its
practical application. This body also presents judgments on draft laws and
other regulations.

Combating unfair competition is an extremely complicated kind of legal
activities. Therefore, Russia needs a new breed of lawyers who could analyze
not only the legal aspects of business but also its economic and financial
fundamentals. These experts are supposed to work out such laws that would
help Russia's economy develop successfully.

Notes

distorted information - искаженная информация

mislead - вводить в заблуждение

quality of a commodity — качество товара

relevant law - соответствующий (имеющий отношение закон)

execution - выполнение, исполнение

transactor units - подразделения, совершающие сделки

breach - нарушение

direct access - прямой выход

MONOPOLIES, NATURAL MONOPOLIES AND COMPANIES HAVING DOMINANT POSITION (KAZAKHSTAN)

In accordance with anti-monopoly legislation, a company is considered
to be a monopoly if its activities restrict or prevent competition and if its
share in a certain goods or services market exceeds 35% of the market, or a
higher annual share as established by the AMA A company whose market share exceeds the said limits, is considered as having a dominant position
The AMA independently determines whether a company has a dominant
position and maintains a register of such companies. It should, however, be mentioned that a company cannot be found to be in a dominant position for the first two years of its operation if it is either producing products which
are not analogues to any products currently produced or sold in Kazakhstan
or if it is producing goods with new technology.

Once entered in the AMA's register, a company becomes subject to the AMA's regulations.

In addition, Kazakhstan's legislation establishes a list of industries which
are considered natural monopolies. All companies that have a dominant
position in the market and which operate in the following industries art
declared to be natural monopolies:

• oil and oil products transport via main pipelines;

• natural gas transport via main pipe lines;

• electrical and heat energy transmission;

• railroad transport;

• air navigation, airport, and harbor service;

• local telephone network service; and

• postal service.

Natural monopolies are also registered with the AMA, but are subject to stricter
anti-monopoly legislation control. In order to comply with the
AMA's instructions, a number of obligations are imposed on natural
monopolies on issues including pricing; conduct of annual audit reports
and publication of the results of such audits; and the provision of services to
all customers on an equal basis. In addition, the legislation imposes a number
of limitations and restrictions on the activities of natural monopolies.

Notes

the AMA = Anti-Monopoly Agency - Антимонопольный комитет
via — через, посредством

comply with - сообразовываться, подчиняться

ANTI-MONOPOLY AGENCY AND ITS COMPETENCE
The recently adopted Government Resolution "On the Issues of the
Agency for Regulation of Natural Monopolies and Protection of

Competition" describes the AMA's primary functions, as well as its rights and
powers, in detail. In accordance with that Resolution, the primary functions
of the AMA include:

• determining which companies may operate as a monopoly or as having
a dominant position and maintaining a registry of such companies;

• regulating the prices and tariffs for services provided by natural
monopolies;

• overseeing general compliance with anti-monopoly legislation;

• inspecting activities of both legal entities and individuals with respect to issues within its competence; and

• developing proposals for the reorganization of natural monopolies.
In pursuing such functions, the AMA has the following rights: to establish

price limitations for goods and services of natural monopolies; to make
determinations as to whether or not a company has a dominant position in the
market; to investigate and consider cases for breach of anti -monopoly legislation.

Notes

registry — реестр, регистрация

oversee - надзирать

legal entities — правовые учреждения

Ответьте на вопросы.

1. What is the notion of unfair competition?

2. What steps are taken against unfair competition?

3. What are the functions of the federal antimonopoly body?

4. Why is combating unfair competition a complicated kind of legal activity?

5. In what cases is a company considered to be a monopoly?

6. What does having a dominant position mean?

7. Who determines whether a company has a dominant position?

8. What is a natural monopoly?

9. What companies are declared to be natural monopolies? Give examples.

10. How do you comply with the AMA's instructions?

11. What are AMA's primary functions? Name some.

12. What right does the AMA have in pursuing its functions?