Volume 03 Issue 10-2023
41
International Journal Of Law And Criminology
(ISSN
–
2771-2214)
VOLUME
03
ISSUE
10
Pages:
41-45
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
ABSTRACT
In order to maintain and strengthen his market position in a competitive environment, an entrepreneur must
constantly work on himself, look for ways to reduce the cost of goods, introduce marketing, and advertise. In the
literature, agreements on mutual agreement, increase, and coordination of prices by competitors without
competition are called cartel agreements (collusion). It is said that such cooperation of competitors in setting prices
allows them to act like a "hidden" monopoly.
KEYWORDS
Market; economy; competition; price; monopoly; businessman; cartel; the law; Uzbekistan; agreement; country.
INTRODUCTION
In the market economy system, despite the fact that
there are now several competing entrepreneurs in the
markets, prices continue to rise. The reason for this is
not only due to natural economic factors, on the
contrary, different price increases by several
competing entrepreneurs due to artificial reasons, for
example, on the eve of holidays, during the holy month
of Ramadan, as well as during the pandemic, the price
of goods in our country increases. rising has become
commonplace. Experts explain the increase in prices
with various economic factors, such as increased
demand, inflation, reduction in production and
imports, etc., but the reason for the increase in prices
is not always due to natural economic factors.
It is known that the more competitors in the market,
the fiercer the price competition. Therefore, the
positive result of competition for the consumer is
lower prices. In practice, the presence of several
competitors in the market does not always mean lower
Research Article
COMPETITION AND HIDDEN MONOPOLY IN THE MARKETS OF
UZBEKISTAN
Submission Date:
October 20, 2023,
Accepted Date:
October 25, 2023,
Published Date:
October 30, 2023
Crossref doi:
https://doi.org/10.37547/ijlc/Volume03Issue10-08
Akbarova Laila Upashevna
Academic Supervisor: Senior Teacher Of The Department Of Transport Economics, Uzbekistan
Erkinjonov Farruxbek Niyozmurod O`G`Li
Tstu Student Of The Department Jurisprudence (International Transport Law), Uzbekistan
Journal
Website:
https://theusajournals.
com/index.php/ijlc
Copyright:
Original
content from this work
may be used under the
terms of the creative
commons
attributes
4.0 licence.
Volume 03 Issue 10-2023
42
International Journal Of Law And Criminology
(ISSN
–
2771-2214)
VOLUME
03
ISSUE
10
Pages:
41-45
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
prices. For most entrepreneurs, competition is an
uncomfortable process. In order to maintain and
strengthen his market position in a competitive
environment, an entrepreneur is forced to constantly
work on himself - to look for ways to reduce the cost of
goods, to introduce know-how and marketing, and to
advertise. Roughly speaking, competition for an
entrepreneur means extra costs, lost profits,
headaches and hard work. Therefore, in practice, most
entrepreneurs prefer cooperation (working together)
than competition. The main goal of any entrepreneur is
to increase income, and for this, he should sell his
goods at a higher price as possible. But it is dangerous
for an entrepreneur to unilaterally raise the price of a
product, because the consumer may go to the side of
his competitors who offer the product at a lower price,
and as a result, the entrepreneur may lose his
customers. But there are also effective ways to solve
this problem - you can agree with competitors on
raising prices, because raising prices is equally
beneficial for everyone. In addition, the risk of losing
customers as a result of simultaneous price increases
by competitors is minimal, as the previous price
difference between competitors is preserved. At the
same time, their profit from the price increase will now
be much higher. Therefore, when entrepreneurs work
together, their income is higher and more stable than
in a competitive environment. According to the
sources, agreements on mutual agreement, increase
and coordination of prices by competitors without
competition are known as cartel agreement
(collusion). This cooperation of competitors in setting
prices allows them to act like a "hidden" monopoly,
since a monopoly can raise prices at any time and
reduce production to create artificial shortages. From
the outside, it seems that there are several competing
entrepreneurs operating in the market for the
consumer and that there is competition between
them, but in fact this may be just an illusion of
competition. Cartels are a dangerous violation of
competition, even worse than monopoly, because the
monopolist acts openly, while the cartels act secretly.
Cartels are a type of crime against consumers
that violate the principles of market economy, cause
hypocrisy (hypocrisy) in the market. (Uzb national
encyclopedia) In addition, cartels can deprive
consumers of the benefits of the reforms carried out
by the state to reduce monopolies and develop
entrepreneurship. For example, in order to reduce the
price of vegetable oil in our country, one of the reasons
why the VAT on import of vegetable oil was set to zero
did not reduce the price of vegetable and cottonseed
oil. it was determined that it was due to price increases.
Also, we cannot say with full confidence that the
increase in the number of car manufacturers in
Uzbekistan will lead to a decrease in car prices, as there
is a risk of cartel agreements by manufacturers in the
automobile industry. In addition, the recent entry of a
private airline into the air transport market may not
lead to the expected price reduction for consumers, as
there is no possibility of price collusion between
national and private companies.
Cartel agreements are prohibited by law in many
countries, and in some countries they are criminal.
According to Article 11 of the Law of the Republic of
Uzbekistan "On Competition", which entered into
force on October 4, 2023, it prohibits concerted actions
and agreements of economic entities that restrict
competition and prohibits such cartel agreements, that
is, competition It is a clear statement that committing
such an offense by violating the legislation on
consumer rights and the legislation on consumer rights
will result in the responsibilities currently stipulated in
Article 178 of the Administrative Responsibility Code of
the Republic of Uzbekistan done
Volume 03 Issue 10-2023
43
International Journal Of Law And Criminology
(ISSN
–
2771-2214)
VOLUME
03
ISSUE
10
Pages:
41-45
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
Cartel agreements are also common in public
procurement tenders, where participants can agree on
price increases or determine the order of winners,
which causes "significant" damage to the state budget.
According to research, as a result of cartels in tenders,
tender sales cost the state 20-30% more.
Cartel violations are complex to uncover and even
more difficult to prove because cartels are organized in
secret, often verbally (by phone, correspondence,
meetings and events). Cartels are usually not put into a
written agreement because they can be used as strong
evidence against the cartel if it is exposed. Therefore,
it is very difficult to prove cartel agreements in
practice.
Competition
law
requires
the
Antimonopoly
Committee to provide direct evidence of an agreement
between competitors. Given the oral and secret
structure of cartels, it is very difficult, sometimes
impossible, to prove the existence of an agreement
between competitors and to find direct evidence.
Are there cartels in the markets of Uzbekistan? There is
no information on the number of cartels in the
country's markets, but no one can rule out that we do
not have cartels. According to the statistics of the anti-
monopoly committee, in 2021, the number of cartel
agreements was determined in 25 cases, and 4,887
cases were related to tender sales. For comparison, in
neighboring countries: in Russia in 2022, 354 cases of
cartels were initiated, of which 242 related to tenders,
in Kazakhstan in 2021 - 24 cases were initiated on cartel
agreements.
Cartel agreements are a headache even for developed
countries that have advanced in the market economy,
because today a new type of cartels - digital cartels -
has begun to appear.
Why are cartels not exposed in Uzbekistan, what is the
problem? There are several reasons for this:
1. The fact that the anti-monopoly committee does not
have additional powers to identify and prove the
agreement. In order to determine direct and indirect
evidence in international practice, the Anti-Monopoly
Committee has been given additional investigative
powers (IT forensics, surprise inspections, informal
surveillance,
interrogation,
etc.)
and
closely
cooperates with law enforcement agencies in this
regard. they cooperate. However, the Anti-Monopoly
Committee of Uzbekistan does not yet have such
powers.
2. The amount of the administrative fine established for
cartel agreements is very low: the maximum amount of
the fine is 10 times the amount of the basic calculation
(BHM) for officials, i.e. 3 million 330 thousand soums.
Imagine that with the help of cartel agreements,
dishonest businessmen illegally earn millions and
billions, and in case of exposure, the maximum fine is
only 3,330,000 soums. In addition, we do not have
liability of legal entities for cartel agreements, fines are
applied only to their officials. In many countries, the
legal entity itself is held liable for cartel agreements,
and the amount of the fine is 5-10% of the company's
annual turnover (or profit) for the period of the cartel.
That is why there are many cases where fines amount
to hundreds of millions of dollars. In some countries,
for example, in the USA, Germany, Japan, even criminal
responsibility (up to deprivation of liberty) is provided.
It should be noted that the most effective mechanism
for disclosing cartels in international practice is the
leniency program. The mechanism of operation of this
program is very simple: for example, the Anti-
Monopoly Committee begins to investigate a
suspicious synchronized increase in prices, then one of
the cartel participants, fearing exposure, voluntarily
turns to the Anti-Monopoly Committee, confesses his
Volume 03 Issue 10-2023
44
International Journal Of Law And Criminology
(ISSN
–
2771-2214)
VOLUME
03
ISSUE
10
Pages:
41-45
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
guilt and receives the necessary provides evidence. For
pleading guilty and cooperating in the disclosure of the
cartel, this cartel member will be exempt from
punishment, and the rest of the participants will be
held fully responsible. The legal basis for the
implementation of this program in Uzbekistan is that
according to Article 27, Clause 9 of the Law "On
Competition", which was adopted in a new version in
2023, a dominant position of the relevant economic
entity or group of persons occurs in the commodity or
financial market. Legal and (or) natural persons who
have made a decision to perform actions (contracts)
that may lead to the emergence or strengthening of
competition and (or) restriction of competition shall
restore the necessary conditions of competition at the
request of an authorized state div. , but we have yet
to witness its implementation. The Antimonopoly
Committee's website even has a special section called
"Report a Cartel". but so far, none of the cartel
members have reported that they have increased the
price among themselves. This is because cartel
participants believe that the antitrust authority is
powerless to prove the existence of a collusion, and
even if discovered, the fines are small.
The experience of developing countries shows that
cartels are often found in food (including agricultural
products),
health
care,
transport,
education,
construction materials and fuel markets. For example,
the international practice of identifying cartels shows
that cement cartels exist in almost all countries. Cartels
have also been found to be widespread in the public
procurement of training materials and in the private
health sector. In addition, trade associations are one of
the convenient places for agreeing and coordinating
prices among entrepreneurs. Also, I would like to draw
attention to the fact that there is a risk of cartel
agreements in the market, where cartel agreements
are often formed in pandemic and crisis conditions,
and reforms to reduce the number of monopolies and
ensure consumer stability are not effective enough to
form a market economy in the country. This article
discussed only some aspects and types of cartel
agreements, besides there are other types of
agreements, such as tacit collusion, vertical
agreements, signal cartels (price signaling) and others.
CONCLUSION
In conclusion, in order to improve the state of cartel
detection in the country, it is possible to consider two
alternative solutions to the problem:
1. Giving the Antimonopoly Committee additional
powers to identify and prove cartel agreements.
However, at present this proposal may be difficult to
implement and may face the following obstacles:
a) Strengthening the powers of the anti-monopoly
committee can be seen as contrary to the policy of
creating
favorable
conditions
for
existing
entrepreneurs (in fact, only dishonest entrepreneurs
are targeted in the fight against cartels).
b) There is a concern about misuse of powers by the
anti-monopoly committee employees;
According to the current legislation, proving the fact of
the cartel agreement and collecting evidence is
assigned to the Anti-Monopoly Committee, which does
not have the relevant powers. If there is a
simultaneous increase in prices in the markets, now the
Anti-Monopoly Committee may require entrepreneurs
to prove that the suspected price increase is not the
result of a cartel agreement and to show reasonable
economic reasons for the price increase. If the Anti-
Monopoly Committee or the court finds the economic
reasons given by entrepreneurs to be unfounded, then
the price increase can be recognized as a cartel
agreement. To solve these problems, it is necessary to
Volume 03 Issue 10-2023
45
International Journal Of Law And Criminology
(ISSN
–
2771-2214)
VOLUME
03
ISSUE
10
Pages:
41-45
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
6.
584
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
develop a separate national concept for the fight
against cartels.
REFERENCES
1.
O’zbekiston Respublikasi konstitutsiyasi
- 2023
2.
“Raqobat to’g’risida” gi qonun O’RQ
-850-son
(03.07.2023)
3.
Oyqulov O., Mansurov K.,Xodjayev B. Raqobat
huquqi
–
Toshkent, TDYuI 2008- 178b
4.
Mualliflar jamoasi. Raqobat huquqi. Darslik
–
T.:
TDYU nashriyoti, 2017, 239 b
Electronic sources:
1.
www.tdpu.uz
2.
www.lex.uz
3.
www.ziyonet.Uz
4.
gazeta.uz
