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მომხმარებლის უფლებების დაცვის ცხელი ხაზი 598 05 44 22 კონკურენციის ეროვნული სააგენტო 2 44 07 70 მომხმარებლის უფლებების დაცვის ცხელი ხაზი 598 05 44 22 კონკურენციის ეროვნული სააგენტო 2 44 07 70 მომხმარებლის უფლებების დაცვის ცხელი ხაზი 598 05 44 22 კონკურენციის ეროვნული სააგენტო 2 44 07 70
COMPETITION
CONSUMER RIGHTS
Anti-dumping

FAQ

The Georgian National Competition Agency is a legal entity of public law established based on the Law of Georgia "on Competition". The Agency is an independent body and doesn`t subordinate to any entity. The Agency is accountable to the Parliament of Georgia and the Prime Minister of Georgia. Accountability is reflected by the introduction of an annual report on the Agency`s activities to the Prime Minister and Parliament.

Georgian National Competition Agency implements competition policy in Georgia. The main task of the Agency is to create and protect conditions to promote competition. For this purpose, the Agency studies the behavior of economic agents, as well as government agencies and administrative bodies, in particular: • Abuse of a dominant position;

• A restrictive agreement, decision or concerted action;

• Unfair Competition;

• Facts of restriction of competition by state authorities, authorities of the Autonomous Republics and/or municipal authorities, and other administrative bodies;

• Controls concentrations;

• Agrees to grant state aid;

• Monitors commodity and service markets;

• Develops binding proposals and recommendations for improving the competitive environment in the Georgian commodity and service markets.

In its activities, the Agency is be guided by the Constitution of Georgia, international treaties of Georgia, the Law of Georgia “on Competition”, the Law of Georgia on the Introduction of Anti-Dumping Measures in Trade, the Statute of the Agency and other legal acts.

Regulated sectors of the economy are the sectors defined by the Organic Law on the National Bank of Georgia, the Law of Georgia on the Activities of Commercial banks, the Law of Georgia on Investment Funds, the Law of Georgia on Electronic Communication, the Law of Georgia on Broadcasting and the Law of Georgia on Energy and Water Supply, as well as municipal service sectors, where free pricing and competition are restricted, and which are defined as regulated sectors of the economy under an ordinance of the Government of Georgia and are subject to tariff regulations. The main provisions of the Georgian Law "on Competition" apply to the regulated sector of the economy, in particular, the norms regulating concentrations, the norms defining the abuse of a dominant position, the agreements restricting competition, and determining the relevant fines. Consequently, in matters of competition, the regulatory bodies are guided by the main postulates of the Law of Georgia "on Competition" and study the issues if the entities are economic agents of the same regulated sector.

In turn the Agency will examine the issue if there are at least one of the following provisions:

1. The alleged violator of the Law, or one of the parties to the concentration is not an undertaking in the regulated sector of the economy

2. The alleged violators of the Law and the parties to the concentration are the undertakings of various regulated sectors of the economy

3. the entity/entities allegedly violating the Law is/are the undertaking(s) of the regulated sector of the economy, but the said action (subject of dispute) has not been carried out in the regulated sector of the economy.

In order to enforce competition law in the regulated field, the Agency and the regulatory bodies of the economy cooperate, which is reflected in the mandatory participation of the second agency in the administrative proceedings conducted by each agency. For this purpose, the memorandums of cooperation with regulatory bodies have been signed.

The agency conducts the investigations of the cases related to alleged violations of the law, examines notifications of concentrations and applications on granting state aid, monitors the markets, and assesses the impact of its made decisions on the competition environment.

The provision of information requested by the Agency is mandatory in all types of proceedings carried out by it. The following are considered as non-provision of information to the Agency: failure to provide information within the established period, providing incorrect information, or incomplete delivery of requested information. In case of failing to the information requested by the Agency on the basis of this Law within the time limit determined by Agency, or provision of incorrect or incomplete information to the Agency, a legal entity shall be fined in the amount of GEL 3,000, and a natural person in the amount of GEL 1,000. The imposition of a fine shall not release a person from the obligation to provide information to the Agency. If the documents related to the case are not received, for the purpose of an investigation, the Agency is allowed to request the court to order the undertaking concerned to submit the relevant documentation.

The Agency shall protect the confidentiality of information on an undertaking, which may, among other secrets, include commercial, bank and/or tax secrets. Specifically, concerning commercial secrecy, the undertaking must request the agency the information submitted by it be classified as commercial secret - for this purpose, an order of the Chairman of the Agency will be issued.

Referring to the Agency on alleged violation of the law is allowed by the submission of the complaint - the complaint form is approved by the normative act of the Chairman of the Agency.

The agency initiates an investigation based on a complaint or its initiative - if there is a reasonable suspicion that a relevant article of the law may have been violated.

A complaint drafted following the form prescribed by law can be submitted to the Agency only by an undertaking that believes that the violations of the Georgian legislation cause direct property damage to him/her. Any other kind of correspondence regarding the alleged violation of the law, including the applications submitted by the persons, will be received as a notification to the Agency and, in case of reasonable doubt, the Agency may use it to start an investigation on its initiative.

For the Agency to initiate an investigation based on a complaint, a standard of reasonable suspicion must be met. In particular, there should be a reasonable suspicion that the law "on Competition" has been violated and there should be no the following grounds for refusing to investigate:

• a complaint is not submitted by an authorised person;

• there is no legal basis provided for by this Law;

• the requested information and/or evidence is not provided within the time limit set under Article 23(5) of this Law;

• insolvency procedures are pending against the respondent undertaking;

• as a result of the investigation of the case, the Agency has made a decision on the subject of the same dispute between the same parties and there are no new circumstances;

• the Agency has made a decision to reject the admissibility of the complaint on the same dispute between the same parties, and there are no new circumstances, except for the decision to refuse to admit the complaint on the grounds provided for by subparagraph (c) of this article;

• the dispute is between the same parties on the same subject, or the court has made a decision on the same subject, or other decision to reject the claim by the plaintiff, to recognize the claim by the defendant, or to approve the settlement of the parties;

• while examining the admissibility of a complaint, the Agency agrees to accept contingent liabilities offered by the undertaking to take specific action to eliminate an alleged violation of the Law.

After applying, within the 3 working days the Agency examines the formal compliance of the complaint with the requirements established by the law. If the submitted complaint does not meet the relevant requirements, the Agency shall identify the complainant failed and set a deadline for the elimination of the defect. In case of not elimination of the defect, the complaint remains as not reviewed. The Agency will examine the material admissibility of the complaint and the capability of initiating the investigation based on it within 30 working days after the complete registration of the complaint. Depending on the complexity of the case, this period may be extended to a maximum of 15 working days.

After making a decision to initiate a case investigation, the Agency shall start the investigation and make a decision not later than 6 months. An investigation, depending on its significance and complexity, may be extended up to 18 months by the decision of the Agency.

After the decision of the Agency to initiate an investigation, the team with the participation of at least 2 persons (employee of the Agency, as well as an invited specialist) can be created. According to the decision of the Agency, the relevant employee of the Agency is appointed as the head of the investigation team. The investigative team is authorized to carry out any action permitted by the legislation of Georgia, which is necessary for the conduct of the investigation of the case. In particular, to collect information about the case; Receive an explanation or hold a consultation meeting to determine the circumstances of the case; Invite an expert; Apply other measures provided by law to collect, examine, and evaluating evidence. 25 working days before the end of the investigation, in particular, before the summary hearing, the Agency is obliged to send the draft decision to the parties and give them time to submit their opinions.

In the frame of the investigation on alleged violations of the law, if there is a risk of destruction of evidence, no information provided by the parties or the assets need an on-site inspection, the Agency, with court permission, carries out inspections of economic agents, both legal and actual places of their activities. The economic agent is not informed in advance about the planned on-site inspection by the court.

The dominant position in the market may be held by one economic agent (individual dominant position) or by a group of several economic agents (group dominant position). In the case of individual dominance - an undertaking which market share exceeds 40% deems that holds a dominant position. In determining this position, in addition to market share, the competitors' market shares, market entry barriers, production expansion barriers, buyer market power, access to the raw material source, degree of vertical integration, network effects, and other market power determinants are taken into account.

Each out of two or more undertakings shall be considered to be in a dominant position if:

• the joint market share of not more than 3 undertakings exceeds 50%, and, at the same time, the market share of each of them is at least 15%;

• the joint market share of not more than 5 undertakings holding the most significant market share exceeds 80%, and, at the same time, the market share of each of them is at least 15%;

The dominant position is not a violation of the law. Only the abuse of a dominant position is prohibited. Specific cases on abuse of a dominant position are given in Article 6 of the Law of Georgia "on Competition".

The following may be regarded as the abuse of dominant position: imposing, directly or indirectly, unfair purchase or selling prices or other unfair trading conditions; margin limitation; refusal to supply; price discrimination; use of restrictive discounts; joining and grouping. Definitions of individual types of abuse and international practice regarding each type are provided in a guidance document issued by the Agency.

For abusing the dominant position according to the law, undertakings shall be subject to a fine, which must not exceed 5% of the annual turnover for the previous financial year when the Agency made a decision. (In case of repeated violation - 10%). In determining the amount of the fine, the agency shall take into account the damage caused by the violation, the duration, and the severity of the violation.

Any agreement, decision or concerted practice of undertakings that have as their object or effect the prevention, restriction and/or distortion of competition within the relevant market, shall be prohibited.

Any agreement, decision or concerted practice of undertakings, or association of undertakings that have as their object or effect the prevention, restriction and/or distortion of competition within the relevant market, shall be prohibited.

Specific cases of anti-competitive agreements are given in Article 7 of the Law of Georgia "on Competition" and it includes: directly or indirectly fix purchase or selling prices or any other trading conditions (fixing); limit production, markets, technical development, or investment; share markets or sources of supply by consumers, location or other characteristics; apply dissimilar conditions to equivalent transactions with the particular trade parties, thereby placing them at noncompetitive conditions; establishing an additional condition/obligation for a party to enter into a transaction that has no substantive or commercial connection with the subject of the transaction. Definitions of these types and international practice for each type are provided in a guidance document issued by the Agency.

In case of detection of an anti-competitive agreement, undertakings shall be subject to a fine, which must not exceed 5% of the annual turnover for the previous financial year when the Agency made a decision. (In case of repeated violation - 10%). In determining the amount of the fine, the agency shall take into account the damage caused by the violation, the duration, and the severity of the violation.

By the Leniency Program a person shall be fully or partially exempted from the imposition of a fine for the violation of the law if he/she meets all of the following conditions: admits, in writing, participation in the agreements provided for by Article 7 the law; provides to the Agency, orally or in writing, important information and evidence known to him/her on the agreement provided for by Article 7 of the law, before the Agency receives this information and evidence from other sources; during an investigation process, continuously and unrestrictedly cooperates with the Agency; terminate its participation in an agreement against the law, unless the Agency considers that the continued participation of the person in the agreement will facilitate the investigation of the case; does not destroy documents and evidence relevant to the case; does not disclose information about the participation in the leniency program. The benefits provided by this article shall not apply to the sole organizers and/or initiators of the agreements or to persons who coerced other persons to participate in the agreements.

Unfair competition is considered to be an act of an economic agent that violates the norms of business ethics and violates the interests of the competitor and the customer. An illustrative list of unfair competition is given in Article 11(3) of the law, for example: damage to a competitor's reputation; Dissemination of incorrect information about the goods; Obtaining commercial information against the owner; Bribing the buyer, the supplier, his employee; Appropriation of the appearance of the goods, etc.

In case of detection of an unfair competition, undertakings shall be subject to a fine, which must not exceed 1% of the annual turnover for the previous financial year when the Agency made a decision. (In case of repeated violation - 3%).

Contingent liabilities are specific liabilities offered by an economic agent to an agency that involves any action taken by it to eliminate an alleged violation of the law. An undertaking can offer contingent obligations both at the stage of admissibility of the complaint, as well as during the investigation of the case and before the draft decision is made by the Agency. In case of acceptance of contingent liabilities by the Agency at the stage of admissibility of the complaint, the Agency does not start the investigation of the case and sets a deadline for the undertaking to fulfill these obligations. In case of acceptance of contingent liabilities by the Agency during the investigation of the case, the Agency shall investigate the case without assessing the violation and shall set a deadline for the undertaking to fulfill these obligations.

At the stage of admissibility of the complaint, if the respondent economic agent does not fulfill the contingent liability within the timeframe specified by the Agency, the study of the issue of admissibility of the complaint will be renewed and the recount of the admissibility period will start again. At the stage of the investigation of the case, if the respondent economic agent does not fulfill the contingent liability assumed by him within the period determined by the Agency, the investigation of the case will be renewed and the undertaking will be fined. Fine for each overdue day shall not exceed 5% of the average daily turnover of the economic agent during the previous financial year before the relevant decision of the Agency was made.

• Merger of two or more independent undertakings resulting in the formation of a single undertaking;

• Gaining of direct or indirect control over an undertaking or its business share through the purchase of securities or interests, or through an agreement or otherwise, by a person already controlling at least one undertaking;

• Participation of one and the same person in the management boards of different undertakings.

The Agency must provide written notification of the concentration in advance if the total (total) annual turnover of its participants in the territory of Georgia, as of the previous financial year of the obligation to submit the notification, exceeds 20 million GEL. and at the same time, the annual turnover of each of the two undertakings participating in the concentration exceeds GEL 5 million.

The fee set by the Agency for the consideration of the notification on concentration shall be GEL 5,000, which shall be paid into the budget of the Agency. Payment is made at the following code: Code: Service fee provided by the Georgian National Competition Agency Recipient Name - Unified Treasury Account

Bank Code- TRESGE22 Account number / treasury code – 707747124

The Agency reviews notification on the concentration no later than 25 working days after the submission of the document confirming the payment of the notification fee and checks the compatibility of the planned concentration with the competitive environment. The Agency shall consider the notification on the concentration no later than 90 calendar days after the decision on the extension of the notification is considered.

If a substantial restriction of effective competition is expected as a result of the concentration to be exercised, an undertaking(s) may propose to the Agency the change of operation (modification) as a structural and/or behavioral measure.

A structural measure - is a commitment made by a party to change the structure of the market (e.g., part of a business may be sold, etc.);

A behavioral measure - is a commitment of the part to take any specific action. If the Agency considers that after the implementation of these obligations, the concentration will no longer affect effective competition, it will make a positive decision on the concentration and will set a deadline for the parties to fulfill their obligations.

If the concentration is carried out, but an undertaking(s) has not implemented/have not implemented the structural and/or behavioral measure the Agency shall impose a fine on the undertaking and the amount of each overdue day shall not exceed 5% of the average daily turnover of the economic agent during the previous financial year before the relevant decision by the Agency. In case of another person - 500 GEL.

If the concentration was implemented by the undertaking(s) without permission or despite the negative conclusion of the Agency, the fine will be imposed. The amount of the fine shall not exceed 5% of the annual turnover of the undertaking during the previous financial year before the relevant decision of the Agency.

In order to restore the original condition, the concentration of undertakings can be revoked if it is implemented and there is a negative decision of the Agency on the incompatibility of the concentration with the competitive environment or if the party does not implement the structural and behavioral measures. The decision to cancel the concentration shall be made by a judge of the Tbilisi City Court by the motion of the Agency.

state aid is a decision made with respect to an undertaking stipulating tax exemptions, tax reductions or tax deferrals, debt relief, debt restructuring, granting loans on favorable terms, transfer of operating assets, monetary assistance, granting of profit guarantees, privileges, or other exclusive rights. In agreement with the Agency, state aid may be allowed which does not significantly restrict or threaten to restrict competition significantly and is granted in two directions: • For the economic development of specific regions; • To promote the preservation of culture and cultural heritage. Following the Resolution N529 of the Government of Georgia of September 1, 2014, the insignificant amount of individual state aid and the general rule of state aid is also defined.

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