Two New Regulations on the Market Concentration Calculation and Concentration Assessment Adopted in Azerbaijan

On August 4, 2026, two supplementary regulations adopted pursuant to the Competition Code of Azerbaijan entered into force: the "Rules for Determining the Level of Concentration in Relevant Markets" and the "Rules for the Assessment of Concentrations by the Antimonopoly Authority" (approved by a Resolution of the Cabinet of Ministers).

The Rules aim to determine the level of concentration in a specific market and identify whether the market structure remains competitive. The Rules for Determining the Level of Concentration in Relevant Markets establish the methodology for calculating the concentration level in a specific market. This process involves first calculating the market shares of the economic entities operating in the market, followed by determining the concentration level using the Herfindahl-Hirschman Index (HHI). An HHI value in the 0–1,500 range indicates a low level of concentration; 1,500–2,500 indicates a moderate level and a figure above 2,500 signifies a high level of concentration. An HHI value below 1,500 is considered indicative of a competitive market structure, whereas a figure of 10,000 corresponds to a fully monopolized market.

 The Rules for the Assessment of Concentrations by the Antimonopoly Authority define the procedure for reviewing concentration transactions notified to the antimonopoly authority, as well as transactions concluded without mandatory notification or authorization that are investigated by the authority on its own initiative. The Rules are intended to provide a framework for assessing whether concentration transactions may create risks to competition and determining whether such transactions can be approved. 

The assessment is based on economic, empirical, and statistical analysis and takes into account competitive conditions in adjacent markets linked by horizontal and vertical relationships. The rules distinguish between horizontal, vertical, and other types of concentration and establish specific criteria for assessing potential risks to competition, including market shares, changes in concentration levels, market power, barriers to market entry, and access to critical resources. 

In cases where a concentration poses risks to competition, it may still be approved subject to certain conditions, provided that technological advantages, efficiency gains, or other pro-competitive effects outweigh the restrictive consequences, do not harm consumers, and cannot be achieved by other means.

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