Page 58 - Azerbaijan State University of Economics

STUDYING OF SPECIAL PRACTICAL ISSUES OF ABUSE OF DOMINANCE

safety of individuals or corporate facilities, extortion, and so on). Then,

competition agencies should seriously consider requesting the assistance of
the police or other authorities to bring criminal charges.

Allegations of abuse of a dominant position may sometimes relate to
industries that are natural monopolies - those in which a single firm can

supply the market at lower costs than two or more independent firms can,
usually because of large economies of scale. Such industries may include

electricity transmission, natural gas distribution, and, possibly, parts of
telecommunications and transportation. In such industries there may be a

need to regulate prices. Such regulation might be undertaken either by a

specialized agency set up to oversee conduct in the particular industry or by
the competition agency itself. But even where there are effective regulatory

controls, there may still be a role for competition policy in maximizing the

scope for market forces to work and ensuring that regulated firms do not
engage in anticompetitive practices in unregulated markets.

Assessing the existence of a dominant position. Determining whether a
firm occupies a dominant position in a market involves two principal steps:

defining the relevant product and geographic markets and assessing the
degree of dominance exercised by the firm(s) within the market.

Defining markets in abuse cases. Specifying relevant product and

geographic markets is essential in the development of most competition law
cases (see Anderson, Khosla, and Monteiro 1996.) As well as providing the

basis for analysis, defining markets contributes directly in assessing
competitive effects. It often has an important bearing on the application of

specific statutes and on the disposition of a case. A narrow definition of a
market will tend to result in higher market shares for incumbent firms, often

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