An Examination of the Application of Competition Law Rules to Sovereign Acts of the State in Iran

Abstract

The expansion of the state’s involvement in economic activities and the increasing scope of its intervention in the market have made the determination of the applicability of competition law rules to governmental measures one of the most significant challenges in public economic law. Ambiguity in distinguishing between sovereign acts and the state’s economic activities has impeded the effective enforcement of competition law rules. This study aims to clarify the legal foundations and criteria governing the application of competition law rules to the state’s economic activities within the Iranian legal system and to propose a framework for distinguishing sovereign acts from economic activities by drawing on the principles of public law and comparative legal studies. In terms of purpose, this is an applied study, and in terms of methodology, it adopts a descriptive-analytical approach. The research data were collected and analyzed through library-based research involving statutes and regulations, judicial decisions, Persian- and English-language sources, and a comparative examination of the legal systems of Iran, the European Union, and the United States. The findings indicate that the “economic nature of the activity” constitutes the principal criterion for determining the applicability of competition law rules to state measures and that the mere affiliation of legal entities with the state does not exempt them from the scope of these rules. Furthermore, the absence of a clear statutory criterion for distinguishing sovereign acts from economic activities, ambiguity regarding the jurisdictional boundaries of the Competition Council, and the lack of consistent judicial precedent are among the principal obstacles to the effective enforcement of competition law in Iran. The results demonstrate that applying competition law rules to the state’s economic activities, while taking into account the requirements inherent in the exercise of sovereign authority, does not conflict with the principles of public law and contributes to the promotion of fair competition, the protection of consumer rights, and the implementation of the General Policies of Article 44 of the Constitution. The study’s contribution lies in proposing an analytical framework based on the criterion of the “economic nature of the activity,” together with supplementary criteria, for determining the scope of application of competition law rules to the state’s economic activities within the Iranian legal system.