NEWS
Kazakhstan is continuing to discuss a draft law on competition developed by the Agency for Protection and Development of Competition of the Republic of Kazakhstan. The bill was presented on April 10 at a meeting of the Public Chamber under the Mazhilis of the Parliament of the Republic of Kazakhstan and was prepared in response to the President’s instructions on the demonopolization of the economy.
One of the most notable proposals in the draft law is the introduction of a mechanism for collective consumer claims in antitrust cases. The idea is to allow claims to be filed on behalf of an undefined group of consumers without requiring each of them to formally join the proceedings. To calculate damages, the proposal suggests forming a focus group of around 30 people, determining the average loss and multiplying it by the estimated number of affected consumers. If the claim is upheld, the initiators receive the awarded funds, after which a public notice is issued so that other affected consumers can claim compensation without initiating separate court proceedings.
In addition to collective claims, the bill contains a number of other proposed changes. These include stronger price oversight in the fuel, energy, transport and communications sectors, new criteria for determining market dominance, and regulation of prices for technologically related services provided by natural monopolies, as well as energy coal. The draft also proposes expanding preventive compliance tools, including the introduction of antitrust audits similar to tax audits. Another element of the reform concerns reducing the state’s role in business activity: newly created state-owned enterprises would operate for up to five years before being privatized, with the exception of strategic and socially significant assets. The bill also proposes lowering thresholds for commodity market analysis and introducing additional approval requirements for intra-group transactions.
The initiative has already sparked an active debate among businesses and experts. Kazakhstan’s Business Ombudsman, Kanat Nurov, has suggested postponing the adoption of the bill in its current form, noting the absence of clear criteria for applying several of the new provisions. According to him, the current framework already allows for turnover-based fines of up to 5% of revenue and the confiscation of monopoly income, while the proposed mechanism could introduce potentially unlimited compensation claims.
Criticism has also come from the National Chamber of Entrepreneurs of the Republic of Kazakhstan “Atameken”. Representatives of the business community argue that treating intra-group transactions as economic concentration is questionable, since such transactions do not increase a company’s market power. At the same time, additional approval procedures could create administrative barriers and complicate corporate processes.
Vice Speaker of the Mazhilis of the Parliament of the Republic of Kazakhstan Dania Yespayeva has also warned that collective claims could potentially be used as a tool in competitive disputes between companies. In her view, small and medium-sized businesses could be particularly vulnerable, as they often lack the legal resources available to large corporations.
At the same time, consumer protection experts point out that Kazakhstan’s current legal framework does not effectively address large-scale violations of consumer rights and is often seen as favoring business interests.
Discussion of reforms to Kazakhstan’s competition legislation has been ongoing for several years. The current debate largely centers on two issues — collective consumer claims and the regulation of intra-group transactions. The success of the reform will largely depend on whether lawmakers can design clear and balanced mechanisms that protect consumers while maintaining a predictable environment for businesses.