About This Service
The conduct of an economic agent in a dominant position falls under special control of the Law of Georgia on Competition. This page explains how dominance is determined (Article 5), which acts count as its abuse (Article 6), how the investigation of a case proceeds at the agency (Article 25) and what fines are provided for the violation (Article 33). Together these four norms build the legal mechanism that constrains the behavior of a powerful market player and gives injured parties a path of defense. Note that the law does not prohibit dominance itself — only the abuse of that power is punishable; the whole analysis turns on precisely this boundary.
Dominance and Its Criteria
Under Article 5, dominance is determined taking into account the market share of the economic agent on the relevant market, the market shares of its competitors, barriers to market entry and to expansion of production, the buyer's market power, the availability of sources of raw materials, the degree of vertical integration, network effects and other factors defining market power. The agency determines market share and power using methodological guidelines for market analysis adopted by an appropriate legal act — which means that establishing dominance is a methodologically calculated process, not an intuitive one.
Forms of Abuse
Article 6 provides that abuse of a dominant position by one or several economic agents — including the case of group dominance — is inadmissible. Acts that may be considered abuse include: imposing, directly or indirectly, an unfair purchase or sale price or other unfair trading conditions; limiting production, the market or technological development to the detriment of consumers' interests; applying dissimilar conditions to equivalent transactions with particular trading partners, thereby placing them at a competitive disadvantage; and imposing on a party supplementary conditions for concluding a transaction that are connected neither in subject matter nor commercially with its subject. The list is not closed — the law covers „other" forms as well, so each practice must be assessed separately. Most disputed conduct in fact fits around this list: a price that does not correspond to competitive conditions on the market; discrimination between partners on identical transactions; or conditions unrelated to the subject of the deal that are nonetheless demanded for its conclusion.