Agency establishes to boost market competition

An independent structure named Competition Agency will soon be established for the purpose of exercising effective state supervision over a free, fair and competitive market environment.

The statute and structure of Competition Agency must be approved before the Prime Minister of Georgia is able to appoint the Chairman of the Agency. This person will hold the role until April 15, 2014, as outlined in the new amendments to the Law of Georgia on Free Trade and Competition.

The Parliament of Georgia adopted the draft law at its third hearing as part of the anti-monopoly reform initiated by the Government last march.

The initiative aimed to improve institutional framework of competition for promoting a free competition and develop a competitive market.

The following key novelties were implemented in the new Law on Georgia "on Competition":

• -The law created guarantees of independence of the Competition Agency. The provisions of institutional framework of competition, which are believed to help grow the independence of the Competition Agency;
• -The scope of application of the Law of Georgia "on Competition" and exceptions of the competition regulatory legislation are amended (including the minimum threshold);
• -Fines for the violation of competition legislation are amended to deal with lack of deterrence. In particular, a fine imposed on an economic agent is defined up to 5 percent of its annual turnover during the last financial year, while if an economic agent fails to remedy the legal basis of the violation of competition legislation or repeats the violation, the Agency is authorized to impose a fine up to 10 percent of annual turnover of economic agent;
• -Economic agent and other interested person is entitled to directly apply to the court, relevant authority or official in relation with the infringement of the competition legislation and request prevention of this infringement and claim compensation for damages incurred, as well as to appeal the Agency's decision in court;
• -The Leniency Program - one of the key tools to detect an economic agent's anti-competitive action on the market in the US and Europe - is being implemented;
• -Functions of the Competition Agency and the independent regulatory authorities are effectively segregated;
• -State aid in any form, which distorts competition or creates a threat for its significant distortion is prohibited;
• -The definition and assessment of the concept of a dominant position in the market is amended;
• -The merger regulation was implemented;
• -The concept of unfair competition is implemented for the purposes of the Law of Georgia "on Competition".