Amendments to Law of Georgia on Competition brings legislation closer to DCFTA requirements

The parliament of Georgia has today approved amendments to the Law of Georgia on Competition that sets the principles for protecting free and fair competition from unlawful restrictions in order to spur on the development of free trade and a competitive market.

Chairman of the Competition Agency of Georgia Irakli Lekvinadze said that the amendments were prepared with the active involvement of EU experts and the best practices of European countries. He said that now the Law of Georgia on Competition is closer to the DCFTA requirements.

The amendments apply to:

Procedural norms: 

• Economic agents will be required to provide information to the Competition Agency both in the course of the investigation and in the process of reviewing and monitoring the concentration notice
• Maximum term of investigation of the case will be increased from 10 to 18 months
• The court will not inform the economic agents in advance, which will facilitate the discovery of facts / correspondence between the parties (if any)

Separation of competence between the Competition Agency and regulatory bodies

• There will be a unified legal framework - regulators remain obliged to enforce competition in their own sectors, although they will be governed by the Law of Georgia on Competition (with the exception of the communications sector until January 1, 2026)
• Regulators will look into whether an action-maker (or concentration participant) of both entities is operating in a regulated area. In all other cases, the competent authority will be the Competition Agency. Inter-agency cooperation is mandatory

Effective mechanisms for controlling concentrations

• A two-phase system for controlling concentrations introduced in the EU is proposed - the so-called simple and complex. The agency evaluates within 25 working days whether the concentration is compatible with a normal competitive environment and a positive conclusion is made. If the issue needs further investigation or there is a suspicion that the concentration may not be compatible, the second phase begins, lasting 90 working days
• Those who implement the concentration without having the reviews of the Competition Agency or its negative conclusion, will be fined which should not exceed five per cent of the economic agent's annual turnover in the previous financial year

Structure of the agency

• The governing body of the agency will have five members on the board. Candidates for members of the council, nominated by the Prime Minister, will be elected by parliament for a term of five years. Board members will make decisions on key issues and procedural issues
• There is also the new position of Executive Director, who will be appointed by the Prime Minister and will coordinate the activities of the structural subdivisions of the agency

The procedural norms of the council will come into force starting June 1, 2021, and the rest on the 45th day after the publication of the amendments.