Will the Competition Code create competition in the country?

Baku/14.09.23/Turan: After nearly two decades in the making, Azerbaijan's draft Competition Code has finally found its way to the Milli Majlis, the country's legislative body. Comprising 12 comprehensive chapters and 83 meticulously crafted articles, this long-awaited legislation seeks to usher in a new era of competition regulation in the country.

The Milli Majlis has expressed its intent to merge several existing legal acts, including the "On Antimonopoly Activity," "On Unfair Competition," and "On Natural Monopolies" laws, into a single, unified legal document once the Competition Code is adopted. This move aims to streamline and modernize Azerbaijan's competition-related regulations.

The origins of the Competition Code can be traced back to 2004 when the Azerbaijani government first embarked on this ambitious legislative journey. However, progress has been elusive, with a near miss in 2006 when the Milli Majlis approved the code in its second reading, only for it to stall thereafter.

The current draft of the Competition Code introduces a novel element by proposing financial sanctions for violations of competition law. Such measures could serve as a significant deterrent against anticompetitive behavior in the Azerbaijani market.

Economist Elchin Rashid, a prominent voice on competition policy matters, shared his thoughts on the fate of this crucial bill during a recent episode of the program "Difficult Question." Rashid cautiously expressed hope for its successful adoption, stating, "The proposed Competition Code, of course, is far from perfect, but nevertheless, of all the bills adopted in recent years, this is the most progressive. This is a big step forward."

Rashid's optimism is tempered by the recognition that Azerbaijan already has some antitrust laws in place, albeit in a fragmented state. These existing laws, according to the expert, not only fail to promote economic development but are often exploited to serve the interests of powerful companies with close ties to government officials.

What lies at the heart of the matter, as Rashid astutely pointed out, is a fundamental clash of interests. The adoption of the Competition Code, he believes, directly contradicts the interests of monopolies and the officials who support them. If enacted and enforced transparently, this legislation could signal a significant shift in the Azerbaijani economic landscape.

Rashid elaborated, "We are talking not only about the economic, but also about the social and even serious political impact of this law. Because if this bill is not only adopted, but also applied in conditions of transparency, then officials will have to compete on an equal footing with other market participants. And then officials will gradually lose a significant part of the informal powers they have."

The fate of the Competition Code hangs in the balance, as Azerbaijan stands at a crossroads between embracing a more competitive, transparent economic environment and preserving entrenched interests.