On the Approval of the “Rules for Calculating Market Shares in the Relevant Market, Defining the Product and Geographic Boundaries, Volume, Structure, and Participants of the Relevant Market”.
Guided by the eighth paragraph of Article 119 of the Constitution of the Republic of Azerbaijan and in accordance with the implementation of the Law No.1051-VIQ dated December 8, 2023, “On the Approval, Entry into Force, and Legal Regulation of the Competition Code of the Republic of Azerbaijan”, as well as the execution of subparagraph 2.4.4 of the Presidential Decree No. 2451 dated January 23, 2024, “On the Regulation of Certain Issues in Connection with the Application of the Competition Code”, the Cabinet of Ministers of the Republic of Azerbaijan hereby decides:
- To approve the “Rules for Calculating Market Shares in the Relevant Market, Defining the Product and Geographic Boundaries, Volume, Structure, and Participants of the Relevant Market.”
- Amendments to this Decision may be made in accordance with paragraph 3.5 of the “Regulation on the Preparation, Coordination, Adoption, and Publication of Draft Normative Legal Acts of Executive Authorities,” approved by the Presidential Decree No. 2328 dated October 6, 2023.
The referred contract was adopted on March 10, 2025.
The approval of the “Rules for Calculating Market Shares in the Relevant Market” brings multiple benefits for companies in Azerbaijan. These rules provide clarity on market structure and participant shares, which allows businesses to assess their competitive standing more effectively. By understanding the market share, product boundaries, and geographic limits, companies can make better-informed decisions regarding pricing strategies, market expansion, and innovation. This framework also aids in ensuring compliance with competition law, minimizing the risk of anti-competitive behavior that could lead to legal or financial consequences.
The approval of these rules will have a significant impact on businesses, regulators, and consumers. Here’s how: For businesses and market participants, these rules provide increased clarity regarding the market structure, allowing businesses to better understand the competitive landscape and assess their market share more accurately. This will also help them understand the competition they face. Companies will need to comply with new market share calculation methods and market boundary definitions, which might require adjustments to their strategies on pricing, product positioning, and geographical expansion. Businesses operating in concentrated markets or those with significant market power may face greater scrutiny from regulators to ensure that their practices do not harm competition or consumers. Furthermore, these rules could influence mergers and acquisitions, requiring stricter assessments of market share and competitive impact.
For regulators, these rules offer enhanced regulatory tools by providing a structured and standardized approach to market share analysis. This will enable regulators to monitor market conditions more effectively and detect any anti-competitive behavior. The clearer definitions of market structures and boundaries will improve market oversight, allowing regulators to intervene when necessary to ensure fair competition.
For consumers, the rules aim to protect against anti-competitive practices, such as monopolistic or oligopolistic behaviors that can lead to price-fixing, reduced quality, or limited choices. Better regulation and oversight will likely lead to more competitive markets, offering consumers lower prices, improved product quality, and increased innovation.
For economic growth, the rules foster fair competition, which contributes to a more transparent and competitive market environment. This, in turn, can lead to greater economic efficiency and market growth. Additionally, by preventing unchecked market dominance, the rules can create a level playing field, supporting entrepreneurship and growth across various sectors.
In conclusion, these rules will support businesses by offering clearer market structures and regulations to assess competition and market share, help regulators maintain fair competition, and protect consumers from anti-competitive practices. Ultimately, the approval of these rules aims to promote a competitive market environment that fosters economic growth and consumer welfare.
