2.1 Overview

Economic entities, the state administration and local government bodies and their officials incur liability for the violation of the Law on the "Protection of economic competition" according to the procedure defined by this legislation.

go to top

2.2. Dominance

An economic entity is considered to have a monopolistic or dominant position in a product market if it has no competitor as a seller (acquirer) or if it captures at least one third of the given market in terms of sale volumes. The abuse of a monopolistic or dominant position (hereinafter "Dominant Position") by economic entities is prohibited.

Abuse of a dominant position is considered to be the:

1. Establishment or application of unjustified, discriminatory and (or) differentiated sale or acquisition prices, or direct or indirect binding of other trading conditions conflicting with the legislation;
2. Restriction of trade or modernization of production or the investments of another economic entity;
3. Creation or maintenance of a deficit in a product market that prejudices consumers' interests by means of product imports, or the unjustified contraction of production, or keeping, spoiling and destroying the products;
4. Application of discriminatory conditions towards consumers or other economic entities;
5. Binding additional obligations on a contract party, including trading objects, which in their nature or implementation aspect are not related to the subject of the contract;
6. Forcing economic entities to restructure or break economic relations;
7. Impediment to the market entry (restriction of the market entry) of other economic entities, or ousting them out from the market, as a result of which the economic entity did not enter the market or was ousted from the market or made additional expenses not to be ousted from the market
8. Offering or the application of conditions that create or may create unequal competitive conditions, when similar conditions have not been offered to other economic entities operating in the product market;
9. Establishment, change or maintenance of discounts or privileges of sale or acquisition prices if they are targeted at the restriction of competition.

go to top

2.3. Monopolistic agreements and concerted actions

Monopolistic agreements are all transactions  signed between economic entities, their agreements,  directly or indirectly concerted practices or conduct, and decisions adopted by unions of economic entities (hereinafter "agreements"), which lead or may lead to, directly or indirectly, restriction, prevention or prohibition of competition in any product market. For example:

1. Establishment of discriminatory and/or differentiated sale and/or acquisition prices;
2. Unjustified increase, decrease or maintenance of a product price;
3. Division of the market according to territorial principle, sale or purchase volumes, product assortment, groups of sellers or acquirers, or otherwise;
4. Impediment to the market entry (restriction of the market entry) of other economic entities, or ousting them from the market, as a result of which the economic entity did not enter the market or was ousted from the market or made additional expenses not to be ousted from the market;
5. Establishment, change or maintenance of discounts or privileges for sale or purchase prices, if they are targeted at ousting other economic entities from the market;   etc.

The conclusion of monopolistic agreements between economic entities is prohibited.

go to top

2.4. Unfair competition

1. Any entrepreneurial activity or conduct, breaking the principles of fairness, i.e. honesty, equity, verity and impartiality among competitors or between the latter and consumers is considered as unfair competition. Unfair competition is prohibited.
2. Any interested person, including consumers, who has incurred damage due to unfair competition can apply to the Commission or court. This right is also reserved for organizations empowered to defend the interested persons' economic interests.
3. Any entrepreneurial activity or conduct, which causes or may cause confusion with respect to another economic entity, its activity or offered products, is considered an act of unfair competition.
   In the context of this Article, confusion may be caused in particular with respect to:
   • Trademark and service mark, whether registered or not;
   • Firm name; 
   • Appearance of products, for instance, industrial design, whether registered or not, packaging, color or any other non-functional features;
   • Civil circulation participants, products, other means of identification, for instance, business symbols, signs or letters substituting words, slogans;
   • Types of product presentation, including advertisement, uniform, product delivery style;
   • Use of names of celebrities, as well as popularity or reputation of recognized characters from fiction or art to foster product consumption demand.
4. Any false or unjustified statement concerning entrepreneurial activity, which discredits or may discredit an economic entity, its activity or offered products, is considered as an act of unfair competition.
   Discrediting may occur while implementing measures to facilitate the promotion or dissemination of products like:
   • Production process;
   • Suitability of products for certain purpose;
   • Quality, quantity or other features;
   • Offer and delivery conditions;
   • Price or its computation method.
5. Any entrepreneurial activity or conduct that misleads or may mislead the public with respect to an economic entity or its activities or its offered products is considered as an act of unfair competition. Misleading could happen during the implementation of measures to facilitate the promotion or advertisement of products, in particularly it may happen with respect to the geographic origin of a product: any unjustified exaggeration of the product quality, the failure to provide relevant information regarding the quality, quantity or other features, which may lead to a false impression (misinformation).
6. Any entrepreneurial activity or conduct which, irrespective of creating confusion, may cause damage to the reputation or goodwill of an economic entity is considered as an act of unfair competition.

go to top

2.5. Antitrust investigation

As already noted, investigations are performed by the Commission and they may be started at the the initiative of the commission or by a complaint of a third party. Any interested person, including consumer, who has incurred damage due to unfair competition can apply to the Commission or court. This right is also reserved for organizations empowered to defend the interested persons' economic interests. The Commission carries out its activities through meetings. The Commission considers the issues in open meetings, except the cases when this could prejudice the interests of persons concerned. Interested parties have a right to adduce evidence, give explanations and present arguments, raise objections against the application of intended responsibility measures, as well as to produce other mediations.  As a result of discussions the Commission makes a decision (conclusion), setting out therein the facts that support the given decision.  At the Commission meetings the decisions are passed by а majority vote of attending members. In case of equal votes the Chairman's or the Deputy Chairman's vote is decisive.

Within 5 days of making the decision (conclusion) a copy of it is provided to the person concerned or is sent to him by certified mail. The Commission's decision takes effect upon its promulgation and can be appealed to the administrative court within 30 days. The maximum term for the Commission to conduct an administrative proceeding is 90 days.

go to top

2.6. Implications for infringers

RA Criminal Code provides with sanctions and punishments in cases of:

The establishment and maintaining of illegal, artificially high or low, monopolistic prices, as well as, restriction of competition by prior agreement or by coordinated actions, in order to divide the market by territorial principle, to restrict entry into the market, to force other economic subjects out of the market, to establish and maintain discriminative prices, is punished with a fine of the amount of 300 to 500 minimal salaries, or with either with imprisonment for 2 to 3 months, or with imprisonment for the term of up to 2 years.

1. The same action committed:
   1. by violence or threat of violence;
   2. by damaging or destruction of somebody's property, or by threat of damaging;
   3. by abuse of official position,
   4. by an organized group,
      is punished with a fine of the amount of 400 to 600 minimal salaries, or with imprisonment for the term of 3 to 8 years, with or without property confiscation.
      Besides.
2. Entering into (establishing, participating in) anticompetitive agreement shall lead to the imposition of a fine on the economic entity (the anticompetitive agreement participant) at the rate of 2% of revenue in the year preceding entry into (establishment, participation in) the agreement, but not exceeding three hundred million AMD. In cases where the conducted activity lasted less than 12 months in the previous year, the stipulated infringements shall lead to the imposition of a fine at the rate of 2% of revenue (however not exceeding three hundred million AMD) from the activity conducted prior to the entry into (establishment, participation in) that agreement but not exceeding the 12 month period.
3. Abuse of dominant position shall lead to the imposition of a fine on the economic entity at the rate of 1% of revenue of the previous year, but not exceeding three hundred million AMD. In cases where the conducted activity lasted less than 12 months during the previous year, the stipulated infringements shall lead to the imposition of a fine at the rate of 1% of revenue (however not exceeding three hundred million AMD) from activity conducted in the period preceding the infringement but not exceeding the 12 month period.
4. Failure to declare the concentration as stipulated by this Law, or enactment of (participation in) prohibited concentration shall lead to the imposition of a fine on the economic entity-concentration participant at the rate of 4% of revenue of the year preceding the participation in the concentration, but not exceeding five hundred million AMD. In cases where the activity conducted in the previous year lasted less than 12 month, the stipulated infringement shall lead to the imposition of a fine upon the economic entity-concentration participant at the rate of 4% of revenue (however not exceeding five hundred million AMD) of the year preceding the concentration but not exceeding the 12 month period.
5. Action of unfair competition shall lead to the imposition of a fine the size of five hundred thousands AMD. Repetition of an infringement stipulated in this part during 1 year shall lead to imposition of a fine at the size of one million AMD.
6. Receipt of prohibited state aid shall lead to the imposition of a fine on the economic entity at the rate of 2% of revenue of the year preceding the infringement, but not exceeding three hundred million AMD. In cases where the activity conducted in the previous year lasted less than 12 months, the stipulated infringement shall lead to the imposition of a fine at the rate of 2% of revenue (however not exceeding three hundred million AMD) from activity conducted in the period preceding the infringement but not exceeding the 12 month period.
7. Failure to submit documents or other information as defined by the Commission decision, or submission of unreliable or false data shall lead to the imposition of a fine of five hundred thousand AMD. Repetition of the stipulated violation during one year shall lead to imposition of a fine of two million AMD.
8. Reventing the Commissioners or Commission staff from performing the rights or duties reserved to them by this Law, the Statute or other legal acts shall lead to imposition of a fine of five hundred thousands AMD.

go to top