Page 57 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE

Competition law provisions regarding abuse of a dominant position

typically include several common elements. First, before the law can be
applied it is necessary to define the relevant market in which the possible

abuse is realized. Second, it is necessary to establish the existence of a dom-

inant position by a firm or group of firms. Third, it is important to identify
specific practices that may be harmful to competition and assess their overall

effects in the relevant market (s).
The specific content and application of these elements can vary

significantly among countries. For example, some countries’ laws specify
that a dominant position can be inferred largely or entirely on the basis of a

large market share. In contrast, some countries’ statutes require consideration

of entry conditions and other factors that influence the ability of firms with
large market shares to exercise market power. An additional key distinction

is that in some countries the mere charging of high prices or the carrying out

of other exploitative acts maybe treated as abuses, while in others the law
focuses on exclusionary conduct by firms that harms the competitive process

(that is, conduct preventing competing firms from entering or expanding).
In many - perhaps most - abuse cases fines and imprisonment are not

appropriate remedies, because there is no criminal nor anticompetitive
intent. In fact, the firm that committed the abuse might well have thought its

behavior to be completely legitimate. Rather, the appropriate remedies will

be either “behavioral” orders to cease conduct that thwarts the competitive
process or structural measures - when permitted under the law - to eliminate

the ability of the dominant firm to commit the abuse. Certainly if companies
do not comply with the decision of the antitrust authority a large fine or other

penalty will be appropriate.
In extreme cases efforts by incumbent firms to deter entry by potential

rivals may extend to outright criminal conduct (for example, threats to the

56