Page 18 - Azerbaijan State University of Economics

Adalat J. Muradov, Nazim Ö. Hajiyev: Analytical frameworks and procedures for application of
demonopolization

Intellectual property related to these sales might be introduced on non-discriminatory basis to all

affiliate enterprises in order to reduce competition for rendering service for installed productive

forces (i.e. technical specifications on the installation and maintenance of equipment).

4.b. Vertical section

Analysis of demonopolization in terms of vertical fragmentation of enterprise funds has

major causes which are interrelated. The first, as mentioned above, vertical section may reduce

costs of horizontal section through isolating the enterprise from factors such as large scale of the

industry. The second, vertical section creates new markets for byproducts and services through

the support of fragmentation and new enterprises into the markets of participants and enterprises

from different markets. Those fragmented enterprises are able to use byproducts and services.

For these byproducts and services approaches cannot be applied even in places supplied on the

basis of competition. Naturally, such approaches should be measured from view-point of an

efficiency lost due to vertical fragmentation. In order to make thorough evaluation, economic

foundation of analysis of above-mentioned vertical mutual relationships should be taken into

consideration.

Alternative ways for bilateral relations of funds are market transactions, contracts and

integration steps. If implementation of market transactions and contracts suffers a setback in

regard to obtaining an appropriate effectiveness, then a authority for demonopolization should

bring together the funds in the same enterprise. Analysis of the actual situation defined cases of

efficiency loss during desintegration.

Characteristics of purchased and sold products should be exactly described in the contracts

of the enterprise. Most frequently, it becomes so difficult and impossible to indicate all

parameters of goods that, for instance, an independent judge, court is not able to determine

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