Overview of the Law of the Republic of Uzbekistan “On Competition”

Publication date: 14.07.2025

On July 3, 2023, the Law “On Competition” No. ZRU-850 entered into force in the Republic of Uzbekistan. This legal act has become the foundation of a new antimonopoly policy aimed at protecting fair competition, restricting monopolistic practices, and ensuring equal conditions for all market participants. The Law regulates relations arising in commodity and financial markets and establishes mechanisms of state control and liability for violations of antimonopoly legislation.

The Law defines several key objectives:

Protection of competition – suppression of monopolistic activities that restrict free market development.
Protection of consumer rights – ensuring priority of citizens’ and businesses’ interests in trade and financial transactions.
Development of a competitive environment – creating conditions for healthy rivalry between business entities.
Reduction of state participation in the economy – decreasing the influence of state-owned enterprises on competitive processes.

The authorized body is the Committee for the Development of Competition and Protection of Consumer Rights, accountable to the President and the Senate. It is empowered to:

Conduct investigations;
Issue mandatory orders;
Assess the impact of regulatory acts on competition;
Initiate court proceedings on the forced separation of business entities.

The Law explicitly prohibits:

Abuse of a dominant position;
Anticompetitive agreements and coordinated actions;
Unfair competition (defamation of competitors, misleading consumers, unlawful use of trade secrets);
Interference of state bodies in business activities if such interference restricts competition.

The Law limits the granting of benefits, preferences, and exclusive rights to individual business entities if this negatively affects the competitive environment. The creation or reorganization of enterprises with state participation requires prior approval of the antimonopoly authority.

The new Law “On Competition” reflects Uzbekistan’s aspiration to modernize its economic system and establish fair market rules. Its implementation is aimed at increasing transparency, strengthening the business climate, and protecting consumer interests.

Regulation of Natural Monopoly Entities

Chapter 2 of the Law regulates the activities of business entities operating under natural monopoly conditions. These markets are characterized by the fact that creating competitive conditions is technologically impossible or economically impractical (e.g., electricity networks, gas supply, railway transport).

This section of the Law aims to minimize the risk of abuse by monopolists and protect consumer interests.

№	Category	Rights of Entities	Obligations of Entities
1	Pricing	- Reduce prices (tariffs) for goods and services simultaneously for all consumers with prior notification of the authorized body.	- Submit draft prices (tariffs) and calculations to the Cabinet of Ministers for approval. - Publish new tariffs at least 15 days before implementation.
2	Relations with Consumers	- Refuse service to consumers who fail to ensure payment (as provided by law).	- Create equal access conditions to goods and services. - In case of insufficient capacity, ensure fair distribution among consumers.
3	Reporting and Control	—	- Submit activity reports to the antimonopoly body. - Provide reliable information for tariff setting.
4	Financial Discipline	—	- Maintain separate accounting of direct production and sales costs in monopoly conditions. - Ensure transparency of financial indicators.
5	General Provisions	- Exercise rights established by law.	- Fulfill all additional obligations set forth by law and acts of the Cabinet of Ministers.

This table clearly reflects the balance: on one hand, natural monopoly entities have rights to protect their operations, but on the other hand, they bear obligations to ensure transparency, equality, and consumer protection.

Prohibition of Anticompetitive Actions

Chapter 3 is one of the key sections of the Law, as it establishes the list of actions considered unacceptable in commodity and financial markets. These norms are aimed at protecting fair competition, preventing monopolistic abuses, and prioritizing consumer rights.

№	Type of Violation	Specific Actions	Possible Consequences
1	Abuse of Dominant Position (Art. 18)	- Setting monopolistically high or low prices; - Creating artificial shortages; - Refusing to conclude a contract despite having capacity; - Establishing discriminatory conditions; - Imposing additional terms of the deal; - Hindering competitors’ market access.	Rising prices for socially important goods, limited consumer choice, crowding out of small players.
2	Abuse of Superior Bargaining Power (Art. 18)	- Unilaterally imposing contract terms; - Restricting counterparties’ choice of partners; - Using economic advantage to exert pressure.	Limitation of freedom of contract, reduced competition among suppliers and buyers.
3	Actions of Digital Platform Operators (Art. 18)	- Mandatory use of certain technologies, data, or digital products; - Creating barriers for alternative solutions.	Dependence of small businesses on a dominant platform, blocking of innovation.
4	Anticompetitive Agreements & Coordinated Actions (Art. 19)	- Price fixing or maintenance; - Collusion in tenders (auctions, exchange trades); - Coordinated production reduction; - Market division by territory, assortment, or customers; - Restricting market access for new participants.	Manipulation of tenders, inflated prices, reduced quality of goods, barriers to market entry.
5	External Coordination of Activities (Art. 19)	- Price or transaction control by third parties not participating in the market.	Artificial price maintenance, elimination of independent competition.
6	Unfair Competition (Art. 21)	- Defamation of competitors; - Inaccurate product comparisons; - Misleading consumers; - Illegal use of trade secrets; - Blocking competitor’s market access.	Damage to reputation, loss of consumer trust, reduced innovation activity.
7	Restrictive Actions by State Bodies or Associations (Art. 22)	- Prohibiting or restricting creation of new enterprises; - Limiting market access; - Granting unjustified privileges and preferences to certain companies; - Imposing priority contracts; - Interfering with business activities.	Artificial barriers for entrepreneurs, monopolization through administrative leverage.

This table shows that anticompetitive actions may come not only from businesses but also from state bodies or digital platforms. The Law strictly prohibits such practices, thereby protecting entrepreneurs and consumers.

State Aid and Participation in Entrepreneurial Activity

Chapter 4 regulates state participation in the economy — one of the most sensitive areas of competition policy. The Law sets clear boundaries for granting state aid and for activities of enterprises with state participation to prevent artificial advantages and monopoly preservation.

№	Regulation Area	Permissible Measures	Restrictions and Prohibitions
1	State Aid (Art. 23)	- Tax and customs benefits; - Subsidies and grants; - State guarantees and concessional loans; - Sale or lease of state property on preferential terms; - Granting rights to use land and subsoil.	- Prohibited to grant aid to individual entities to the detriment of competition; - All draft acts on state aid are subject to antimonopoly review.
2	Creation and Operation of State Enterprises (Art. 24)	- State participation in economic activities through state-owned enterprises or PPPs; - Creation of enterprises for strategic sectors.	- Prohibited to create state enterprises in sectors with ≥5 private companies; - Prohibited where state body performs licensing or registration functions; - Prohibited for affiliates to compete with private companies; - Prohibited to engage in unrelated competitive activities; - Prohibited to acquire shares in private companies without antimonopoly consent.
3	Prior Consent of Antimonopoly Authority (Art. 25)	- Required for creation, merger, or change of activity of state enterprises and their affiliates; - Consent may be issued for up to 3 years if market development is insufficient.	- Authority may refuse if there are risks of competition restriction; - In case of violation, the enterprise is subject to liquidation by order or court decision.

This table demonstrates that while the Law allows state participation in the economy, it strictly limits it within the framework of competition protection.

Antimonopoly Regulation of Economic Concentration

Chapter 5 regulates state control over transactions that may lead to economic concentration — mergers, acquisitions, or asset transfers that could affect competition. The purpose is to prevent market monopolization and preserve fair competition.

№	Type of Transaction	Conditions for Consent	Decision of Antimonopoly Authority	Consequences of Violations
1	Merger or Accession of Companies	- If total asset value or revenue exceeds a set threshold; - If the union leads to creation of a dominant entity.	- Consent without conditions; - Conditional consent (e.g., divestment of part of assets); - Refusal if there is a risk of monopolization.	Transaction is void without consent; Possible fine; Order to restore initial state.
2	Acquisition of Shares (Equity)	- If acquiring a stake that grants control over management; - Upon reaching a certain ownership threshold.	- Consent or conditional consent; - Refusal if there is a risk of competition restriction.	Transaction is invalid; Liability under the law.
3	Acquisition of Fixed or Intangible Assets	- If value exceeds a norm set by the Cabinet of Ministers; - If acquisition leads to resource concentration.	- Consent or conditional consent; - Refusal if access to the market would be restricted.	Transaction is annulled; Property returned; Administrative measures applied.
4	Creation of a New Legal Entity by Several Companies (Joint Venture)	- If established in a sector where there is a risk of restricting competition; - If combined assets/revenue exceed threshold.	- Consent for creation; - Conditional consent (e.g., limiting activities in certain market segments); - Refusal if risk of monopolization.	Creation of entity is declared illegal; Order for liquidation.

This table clearly shows that any business combination — through mergers, acquisitions, or new structures — must be analyzed for its impact on competition. Without consent of the antimonopoly authority, such transactions have no legal force.