This chapter examines Kazakhstan’s competition advocacy tools, including competition impact assessments, market analyses, proactive policy instruments and awareness-raising activities. The chapter also highlights the need for more active and economically grounded advocacy to support effective enforcement.
OECD Peer Reviews of Competition Law and Policy: Kazakhstan 2025
Abstract
In Kazakhstan, the analysis and evaluation of draft regulations was first introduced in 1998 and was further developed with the adoption of the 2015 Entrepreneur Code (Akhmetzhanova, Mukhamedzhanova and Ten, 2017[1]). Article 83 of the Entrepreneur Code defines regulatory impact analysis (RIA) as an analytical procedure for comparing costs and benefits of a regulatory instrument with the purpose of improving effectiveness and efficiency of governmental policies. It is mandatory before every introduction of a new regulatory instrument, as well as for existing instruments where stricter regulation is proposed. RIA is carried out by regulatory government bodies for the draft regulations that they prepare (Akhmetzhanova, Mukhamedzhanova and Ten, 2017[1]).
In 2022, as a part of the 5th antimonopoly package,1 Article 83 was supplemented to provide an explicit legal basis for competition (impact) assessment within the RIA. In its essence, competition impact assessment is the assessment of the impact of a regulatory instrument on the competitive environment. It is a recommended practice for all OECD members, following the OECD Recommendation on Competition Assessment [OECD/LEGAL/0455]. It can be conducted both before and after the adoption of the legal act. In 2023, the Agency adopted Rules for conducting competition assessment.2
The body drafting a regulatory instrument must send the draft to the Agency. If the Agency finds that the regulatory instrument may adversely affect competition, the drafting body must present alternative regulatory options that can achieve the same objective with less adverse effects on competition. If no alternatives are possible, a reasoned justification must be provided. After receiving the draft, the Agency conducts the competition impact assessment in 15 working days. This deadline can be extended for a maximum of further 15 working days.3 It is also possible for businesses to propose to the Agency to conduct a competition impact assessment for laws they deem to have a negative impact on competition. In practice, we found that the Agency appears to be overly relying on receiving information from users and businesses, rather than actively scrutinising legislation.
The procedure for conducting a competition impact assessment is presented in Infographic 7.1. After the competition impact assessment is conducted, the Agency makes conclusions based on the results of the assessment. The conclusions are a mandatory appendix to the regulatory impact analysis. They are advisory in nature. The Agency has issued 17 competition impact assessment conclusions up to date.
The Agency does not have a dedicated Competition Assessment unit but various bodies inside the Agency contribute to the assessment. The first assessment is carried out by the sectoral departments of the Agency (where the staff are also carrying out market analyses, supporting the merger review and competition law infringement teams, and monitoring regulated prices). Other bodies also appear to have input into the process, including the Council on Barriers and the Analytical Research Centre.
The full RIA of the draft regulation, including the competition impact assessment, is then reviewed by the Interdepartmental Commission for the Regulation of Entrepreneurial Activity.4 It provides an opinion and, in case of disagreement, conducts an alternative regulatory impact analysis.
Source: Rules for conducting the competition impact assessment,. https://adilet.zan.kz/rus/docs/G23X0000198.
It is important to clearly distinguish between the competition impact assessment and the powers of the Agency in relation to anti-competitive actions of public authorities. Unlike some jurisdictions, the Agency does not have the power to prevent a legal act from being adopted, even if its impact is anticompetitive – the Agency’s role is mainly advisory. The prohibition of anti-competitive actions of public authorities is, on the other hand, a powerful instrument that allows the Agency to identify practices and agreements with anti-competitive effects and declare them void. While the competition impact assessment is an ex-ante mechanism, the prohibition of anti-competitive actions of public authorities is enforced ex post. Thus, it is possible that, at first, a competition impact assessment is conducted and later, if the Agency’s recommendations are not implemented and the regulatory act is adopted, the notification is sent to the regulatory body.
The Agency has the power to carry out “analyses of the state of competition in product markets”.5 The Kazakh framework identifies several purposes of a market analysis, for instance to determine the level of competition in the market, identify market entities holding a dominant or monopoly position in a product market, assess the effects of an economic concentration on competition, or develop measures to protect and enhance competition. Most of these studies are carried out by the sectoral departments, although the Analytical Research Centre also carries out some studies. As the Analytical Research Centre is not formally part of the Agency, it is not clear to which degree the Agency is allowed to rely on its finding for building a competition infringement case.
The Agency has adopted several methodologies for market analyses. The most general is the methodology for conducting market analyses in product markets6 and has eight stages:
1. Criteria for interchangeability of products: The Agency must define the properties of a product that determine the buyer’s choice and the products that are potentially interchangeable with the product in question. This includes the SSNIP test and an analysis of price elasticities.
2. Relevant product/geographic markets: After defining the product market, the Agency must define the geographical market. Possibility of purchasing products in a certain territory, transportation costs, preservation of products during transportation, and potential restrictions on import and export are to be factored into the analysis. The SSNIP test, analysis of sales areas and price elasticities should be used.
3. Time interval for the study: The Agency must determine the time interval, depending on the specifics of the product market (e.g. seasonality or stability of products, periods of minimum or maximum demand) and availability of information.
4. Composition of market entities operating in the product market: The Agency’s next step is to find all market entities operating in the relevant product market and identify them.
5. Volume of the product market and market share calculation: The volume of the product market is calculated as a sum of sales by market entities operating on that product market. Market shares are then calculated as ratios of the sales of a market entity to the total volume of the product market.
6. State of the competitive environment in the product market: The Agency calculates the concentration indices, such as market concentration ratios (CR3 or CR4). Further, the Agency analyses price dynamics, changes in demand, openness of the product market, frequencies of new entries, the level of technological development and innovation, market strategies, the degree of independence of competing market entities etc. To analyse dominance, the Agency can also calculate the Lerner index.
7. Barriers to entry: The Agency identifies potential (economic, administrative, legal, technological and other) barriers to entry and determines whether they are surmountable or not.
8. Conclusions based on the results of the analysis: The Agency prepares conclusions of the market analysis which summarises the findings and proposes recommendations for the development of competition in the relevant product market. The conclusions are approved by the head of the structural or regional office conducting the market analysis. The conclusions are published on the website of the Agency.
Separate methodologies are adopted for financial service markets,7 and markets where new SOEs owned by either the state8 or the National Bank of Kazakhstan9 will be created.
While the methodologies outlined appear to follow good practice, including a degree of economic analysis of the market, the market analysis carried out by the Agency is not the same as Market Studies or Market Inquiries in the sense understood by most OECD jurisdictions. Discussions with stakeholders have shown that the Agency very often uses structural presumptions and relies (almost solely) on market shares, market concentration indicators and price levels to establish competitive issues. Further, Kazakhstan’s administrative regions are used to define geographic markets without consideration of the economic reality (some goods are likely to be available across regional borders for instance, or consumers living near a large agglomeration across a regional border may shop there, rather than locally). Hence, market analyses carried out by the Agency are better described as market monitoring through the use of certain indicators10 (market shares, concentration etc.) and not as a market study attempting to fully understand the relevant market. It is therefore not surprising that certain stakeholders expressed dissatisfaction with market analyses, finding them oversimplified and not sufficiently in-depth.
There are two types of markets analyses: planned and ad hoc. Planned market analyses, as indicated, are planned in advance. At the end of the calendar year, the list of planned market analyses for the following year is adopted by the Chair of the Agency.11 This list is published on Agency’s website every January. The methodology lists the criteria used for identifying the target product markets. These criteria, by priority, include (i) social significance of the product, (ii) instructions of the President, (iii) instruction from the Agency (for regional offices), (iv) complaints from individuals or legal entities, (v) impact of product markets of the Eurasian Economic Union on national markets, (vi) import dependence over 35%, (vii) impact on the consumer basket, (viii) changes in legislation etc.12 Thus, the Agency is required to follow these criteria when choosing product markets for conducting a market analysis. Unplanned (ad hoc) market analyses can be conducted if they are ordered by the Chair of the Agency or a head of the regional office.
The time available to conduct a market analysis is limited. In the past, it was uniformly set at 12 months, but it was later reduced. Today, planned market analyses must be conducted in 6 months, while ad hoc market analyses must be conducted in three months. The time to conduct market analyses for financial service markets remains at 12 months.
The timeframe for market analyses is very short. According to the Agency this is related to need to respond quickly to any anti-competitive behaviour in the wake of the Covid-19 pandemic, and especially after the January 2022 protests, which appear to have had the effect of increasing state involvement in the economy.
The timeframes for conducting market analyses are, on average, shorter than those in OECD member countries. The Agency justifies the reduction in timeframes by reference to better digitalisation, which accelerates analytical processes. This is despite the still-limited access to Internet by its staff, discussed supra. Moreover, it remains unclear why such short deadlines are deemed necessary in all cases, regardless of the specific market or product, and why they must be prescribed by law rather than adjusted according to the Agency’s circumstances. Since the timeframes are legally binding, they also constrain the Agency’s flexibility.
According to the Agency, the reduction in the duration of competition assessments—from 12 to 6 months for planned assessments and to 3 months for unplanned ones—is because of several factors: the relatively small number of medium and large enterprises in Kazakhstan (just 0.5% of all businesses); the smaller scale of product markets compared to developed economies; the use of digital tools that accelerate data collection; and increased global volatility, which drives rapid shifts in market structures.
Stakeholders have also emphasised a lack of transparency when it comes to market analyses. Sometimes there are not published, or only a short summary. Given that market analyses can give valuable information to market entities, the authorities and the public, the full publication of market analyses would be welcome.
The Agency has several proactive tools to address competition concerns and prevent potential anti-competitive conduct. There are several tools of proactive competition policy (so-called soft-law approaches). In particular, these are anti-monopoly compliance, warning, and preliminary review of agreements.
7.3.1. Anti-monopoly compliance
As a part of the second antimonopoly package,13 a system of measures to prevent competition law violations, called anti-monopoly compliance, was introduced in the Entrepreneur Code (Article 195-1). Within the framework, market entities have an option of adopting external and internal acts of anti-monopoly compliance which can help prevent potential competition law violations. There are distinctions in treatment and, consequently, implications of external and internal acts of anti-monopoly compliance.
External acts of anti-monopoly compliance
An “internal act of anti-monopoly compliance” (“competition compliance programmes”) provides the methods for identifying, assessing and mitigating the risks of competition law violations within the firms (Medeubayeva, 2021[2]). It contains methods for risk assessment, as well as procedures for organising work to manage these risks. Internal acts are not submitted to the Agency for consideration but serve as a risk management system within the firm itself.
An external act of anti-monopoly compliance determines the “policy and rules of a market entity for fair competition in the relevant product market”.14 It establishes a model of market entity’s behaviour in the market that is compliant with competition law (Medeubayeva, 2021[2]). Thus, the external act contains the application of competition law to specific situations and practices, for instance prices, sales, and other ways of interacting with customers and competitors.
Market entities may submit draft external acts to the Agency to assess their compliance with Kazakhstan’s competition law. If deemed compliant, the act serves as a legal clarification for the specific case or entity.15 However, this does not provide immunity: the Agency may still investigate if signs of a violation emerge. As such, the practical value of this mechanism is limited, since it offers no safe harbour.
The Agency views anti-monopoly compliance as a tool to raise awareness of competition risks and promote responsible decision-making. Yet, due to the high volume of submissions (Figure 7.2, Box 7.1), its effectiveness is questionable. Reviewing these acts consumes significant resources and diverts attention from enforcement. The growing administrative burden limits the Agency’s capacity to pursue violations. It remains unclear whether the benefits justify the costs. The Agency should assess the system’s efficiency and consider abolishing it or restricting its use—potentially through an administrative fee.
A preferable approach may be to abolish the mechanism entirely, requiring firms to self-assess. Alternatively, introducing a fee could deter unnecessary submissions.
In 2017, the Ministry of National Economy adopted a model “external act of anti-monopoly compliance” with two versions: one for domestic and one for cross-border market entities.16 These acts express the company’s intent to (i) uphold fair competition, (ii) prevent harm to competition or other entities, and (iii) ensure equal conditions for all market participants. The core of the act is a list of anti-competitive agreements and practices the entity commits to avoid. However, the list is general and mirrors standard prohibitions under the Entrepreneur Code. Greater specificity would enhance the utility of the act and reduce the assessment burden on the Agency.
Source: Annual reports from the Agency.
In recent years, the Agency has paid particular attention to “socially important food products”. While they are subject to price regulation under the Kazakhstan’s law (Article 116 of the Entrepreneur Code), the Agency also played a part by concluding anti-monopoly compliance agreements with several producers and retailers.
In January 2021, the Agency concluded an anti-monopoly compliance agreement with GormolZavod, a producer of milk and dairy products. The agreement concerned prevention of unjustified price increases for socially important food products, such as certain butter, pasteurised milk and cottage cheese products.
In August 2021, the Agency announced that an anti-monopoly compliance agreement was concluded with Kazakhstan’s retailer Magnum Cash & Carry. The company agreed to reduce its markup from 15% to 10% for seven types of socially important food products (eggs, buckwheat, beef, potatoes, cabbage, carrots and onions). Further, it agreed to refrain from competition law violations, such as cartels, other restrictive agreements, refusals to deal etc.
A similar agreement, providing a decrease of markup from 15% to 10% but for a more extensive range of products (such as rice, chicken, salt, sugar, sunflower oil etc.) was announced in June 2022 and was concluded with four retailers.
7.3.2. Preliminary review of agreements
Market entities intending to conclude an agreement that may be permitted under the framework for restrictive agreements have a right to submit a draft agreement to the Agency for consideration.17 Within 30 calendar days, the Agency issues a decision on the compliance or non-compliance of the draft agreement with the Kazakhstan’s competition law. In case of compliance, market entities must, upon concluding the agreement, notify the Agency of such development. The Agency can cancel its decision in certain instances (e.g. in the case of inaccurate information provided by market entities). In such cases, market entities must terminate the already concluded agreement.18
Applications for preliminary review of agreements are rare and amount to one or two applications annually. This is quite surprising, as it is generally attractive for companies to obtain a conformation of the legality of their agreement in advance rather than being scrutinised for competition law violation later on under the threat of sanctions.
7.3.3. Warnings
Another proactive soft-law mechanism available to the Agency is a warning.19 It is used in cases where a market entity or a state/local body issues a public statement describing how it would behave in the product market and such behaviour may lead to a violation of competition law. If there are no grounds for an investigation, the Agency can nevertheless interfere by issuing a warning that the planned actions may violate Kazakhstan’s competition legislation. Therefore, the difference between a warning and a notification relates to the subject matter which it addresses – notifications are issued with respect to implemented actions that show signs of competition law violations, while warnings are issued with respect to statements about future actions that might violate competition law.
The Agency must make a decision to issue a warning within 10 working days from the date when it became aware of the public statement of the planned behaviour. The warning must be sent in writing to the market entity or a state or local body and must contain (i) conclusions on the existence of grounds for sending a warning, and (ii) provisions of Kazakhstan’s competition law that may be violated.
As presented in Figure 7.2 and Figure 7.3, the number of warnings issued by the Agency has varied throughout the years but has been growing in recent years. A vast majority of warnings relates to concerted practices, while the abuse of a dominant or monopoly position, unfair competition and anti-competitive agreements and actions of public authorities represent a smaller share of warnings.
Source: Annual reports from the Agency.
Beside many enforcement competences, the Agency also has certain advocacy-related competences. In particular, the Agency:
disseminates information on the application of Kazakhstan’s competition law
promotes fair competition, and
posts information about its market analyses and investigations on the internet.
The Agency is carrying out several activities to increase public awareness of its work. Firstly, the Agency publishes press releases and materials on its official website which is gaining more and more attention. In 2023, the number of visitors of the website was 1 630, a significant increase from previous years. Secondly, the Agency actively collaborates with media. The Chair of the Agency as well as deputies and heads of departments participate in interviews, roundtables and press conferences. Thirdly, the Agency actively manages its social media accounts (including Facebook, Instagram, Telegram and YouTube) and publishes materials, including videos, there. Finally, the Agency also organises advocacy events, such as workshops, trainings and campaigns. These events can be directed at the business community, lawyers, public bodies, consumers and the general public. The number of events through the past years has varied, as shown in Table 7.1.
Source: Data provided by the Agency.
7.4.1. Compliance programmes
In 2022, the Agency adopted methodological recommendations for developing and implementing compliance programmes.20 They were designed as guidance for market entities that faced difficulties in how to approach the development of the internal act. In their essence, the recommendations stipulate the following: (i) the market entity must form a compliance policy, (ii) there must be a person within the market entity responsible for anti-monopoly compliance, (iii) assessments of compliance risks must be performed regularly, (iv) a risk management system (including employee trainings) must be developed, (v) measures of anti-monopoly compliance must be implemented, (vi) an independent expert should annually assess market entity’s compliance policy, (vii) the management should annually assess the effectiveness of anti-monopoly compliance.
Upon its introduction, the market entities lacked incentive to adopt internal acts because developing and implementing internal acts is costly, particularly in terms of human resources (Medeubayeva, 2021[2]). To incentivise market entities to adopt internal acts of anti-monopoly compliance, the 5th antimonopoly package21 introduced a benefit – if a violation of competition law occurs despite the existence of an effectively functioning internal act of anti-monopoly compliance, this shall be taken into account when considering the case of competition law violation.22 This implies the possibility of reductions of administrative fines which is reaffirmed in the recommendation. The law does not specify the extent of such reductions, but public statements of Agency’s staff suggest that these reductions would go up to 50% of the administrative fine (Medeubayeva, 2021[2]). To establish proper law enforcement practice, it is necessary to develop clear criteria for evaluating the effectiveness of an internal antimonopoly compliance act, as well as to establish a transparent procedure for conducting such assessments by the Agency.
References
[1] Akhmetzhanova, S., A. Mukhamedzhanova and K. Ten (2017), Regulatory Impact Assessment: Kazakhstan and World Practices, https://www.astanacivilservicehub.org/uploads/case_studies/Regulyator_Eng.pdf.
[4] Kazakhstan (2024), Annual Report on Competition Policy Developments in Kazakhstan: 2023, https://one.oecd.org/document/DAF/COMP/AR(2024)47/en/pdf.
[3] Kazakhstan (2023), Annual Report on Competition Policy Developments in Kazakhstan: 2022, https://one.oecd.org/document/DAF/COMP/AR(2023)47/en/pdf.
[2] Medeubayeva, M. (2021), “Compliance will help reduce antitrust fines by half”, Inbusiness.kz, https://inbusiness.kz/ru/news/v-chem-zaklyuchayutsya-preimushestva-antimonopolnogo-komplaensa-dlya-biznesa.
← 1. Law of the Republic of Kazakhstan dated 3 January 2022, no. 101-VII ZRK.
← 2. Order of the Chairman of the Agency for the Protection and Development of Competition of the Republic of Kazakhstan dated 10 August 2023, no. 198/NK.
← 3. Paragraph 4 of the Rules for conducting the competition impact assessment.
← 4. Order of the Prime Minister of the Republic of Kazakhstan dated 16 November 2018, no. 146-r.
← 5. Article 196 of the Entrepreneur Code.
← 6. Order of the Chairman of the Agency for the Protection and Development of Competition of the Republic of Kazakhstan dated 3 May 2022, no. 13.
← 7. Order of the Chairman of the Agency for the Protection and Development of Competition of the Republic of Kazakhstan dated 29 April 2022, no. 12.
← 8. Order of the Minister of National Economy of the Republic of Kazakhstan dated 28 February 2017, no. 103.
← 9. Order of the Minister of National Economy of the Republic of Kazakhstan dated 28 February 2017, no. 104.
← 10. Methodology for analysing the state of competition in product markets, paragraph 6; Article 196 of the Entrepreneur Code.
← 11. For 2025, the planned market analyses will focus on the fuel and energy sector, transport and communications sector, industrial and agro-industrial sector, as well as the social sector and financial markets.
← 12. Appendix to the Methodology for analysing the state of competition in product markets.
← 13. Law of the Republic of Kazakhstan dated 28 December 2016, no. 34-VІ ZRK.
← 14. Article 195-1 of the Entrepreneur Code.
← 15. Article 195-1 of the Entrepreneur Code.
← 16. Order of the Minister of National Economy of the Republic of Kazakhstan dated 13 February 2017, no. 65.
← 17. Article 171 of the Entrepreneur Code.
← 18. Order of the Minister of National Economy of the Republic of Kazakhstan dated 28 February 2017, no. 97.
← 19. Article 198 of the Entrepreneur Code.
← 20. Order of the Chairman of the Agency for the Protection and Development of Competition of the Republic of Kazakhstan dated 21 April 2022, no. 117/NK.
← 21. Law of the Republic of Kazakhstan dated 3 January 2022, no. 101-VII ZRK.
← 22. Article 195-1(6) of the Entrepreneur Code.