Page 38 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE

regulation cases often requires intensive preparation. The agency needs

to acquire some technical expertise in the relevant industry if it is to be
effective in the proceeding. In such cases it is often useful to work with

independent, outside experts who have specific industry expertise.
Finally, in countries that do not have specific laws applying to natural

monopolies, the competition authority may have a significant role in the

regulation of these sectors. The relevant government ministry may continue
to exercise control over the industries, including control of prices and

market access, but the competition authority may decide, usually on a case-
by-case basis under the competition law, concerns relating to the

monopoly's equitable treatment of both new entrants and consumers.

State aids and environmental policy

A general goal of competition advocacy should be to ensure equal
conditions for all market operators. This equality may be distorted by

government policy establishing different rules for domestic and foreign

companies, for state-owned and private firms, or for large and small
enterprises. In this regard state aids should receive careful scrutiny by

the competition agency Subsidies, tax and social security rebates,

preferential loans, capital injections, public procurement, and other
benefits for selected market operators, sectors, or regions can be harmful

to competition. For example, a subsidy given for promoting the use of
natural gas may place oil suppliers at a competitive disadvantage. To the

extent that there are other socioeconomic welfare objectives, such as
reducing pollution, a careful cost-benefit analysis needs to be conducted.

Otherwise subsidies provided to certain companies producing

environmental technologies may adversely affect other parts of the

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