Abuse of a dominant position is one of the most complex and critical areas of competition law, aimed at maintaining a healthy competitive environment in the market. When a company holds a significant market share (usually over 40%) and possesses market power, it bears a special responsibility not to use this advantage to squeeze out competitors or harm consumer interests. In Georgia, where many economic sectors are characterized by high concentration, such disputes are becoming increasingly relevant. A dominant company may set unfair prices, create artificial barriers for new entrants, or force suppliers to act solely in its interests. Such actions violate the Law of Georgia on Competition and are subject to strict sanctions by the Georgian National Competition and Consumer Agency. This service provides legal assistance both to companies harmed by the actions of a dominant player and to major players who are groundlessly accused of monopolizing the market.
What does this service cover?
Handling dominance abuse cases involves deep economic and legal analysis:
- Market Research and Dominance Determination: Defining the boundaries of the relevant market (product and geographic) and calculating the company's market share to determine if it qualifies as dominant under the law.
- Conduct Qualification: Assessing whether the company's strategy (e.g., rebate systems, exclusive contracts) constitutes abuse.
- Filing Complaints with the Competition Agency: Submitting a well-evidenced complaint to initiate administrative proceedings.
- Defense Strategy Development: Preparing arguments for the dominant company proving that its actions are driven by objective economic necessity and do not hinder competition.
- Litigation: Appealing the Competition Agency's decisions in court or claiming damages through civil proceedings.
Common Real-World Scenarios
Practical examples of abuse include:
- Predatory Pricing: A dominant company sells products below cost to drive smaller competitors out of the market and subsequently raise prices.
- Tying/Bundling: A company agrees to sell a popular product only if you also purchase another, less desirable product.
- Refusal to Supply: A dominant entity owning essential infrastructure (e.g., port, railway, network) denies access to a competitor or sets discriminatory tariffs.
- Exclusive Distribution: A dominant player forces distribution networks not to sell competitors' products.
Georgian Legal Framework
The main regulatory act is the Law of Georgia on Competition, specifically Article 6, which prohibits the abuse of a dominant position. The law details prohibited actions: imposing unfair purchase or selling prices, limiting production, applying discriminatory conditions, etc. Enforcement is carried out by the Georgian National Competition and Consumer Agency, which has the authority to fine the violating company up to 5% of its annual turnover. Additionally, the Administrative Procedure Code of Georgia regulates the rules for appealing Agency decisions in court.
Process: How does a specialist work?
A lawyer and an economist jointly analyze the market. If the client is the complainant, evidence is gathered: invoices, contracts, correspondence confirming discrimination or restriction. A comprehensive complaint is prepared. If the client is the defendant (dominant), the lawyer prepares an "Objective Justification" strategy — proving that the action served efficiency or quality control. The process involves active communication with the Agency during the investigation stage.
Why Legal.ge?
Competition law is a niche and specific field requiring not only legal but also economic knowledge. On Legal.ge, you will find experts with experience working with the Competition Agency and handling complex antitrust disputes. We will help you protect your business from unfair competition or prove the legality of your commercial policy.
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