The Agency and Consumer Rights
State supervision in the field of consumer protection is exercised by the agency determined by Georgian legislation, and cases brought by it are among the most common administrative disputes for businesses. Under the Law of Georgia on Protection of Consumer Rights, the agency studies facts of suspected violations of consumer rights, adopts decisions and, where a violation is established, imposes obligations on the trader. All three pillars of this process — what counts as a violation, how the study begins, and what fine follows non-compliance with a decision — are precisely defined by the law.
The Prohibition of Unfair Commercial Practices
The conceptual basis of a violation in the law is the prohibition of unfair commercial practices. A commercial practice is unfair if it contravenes the requirements of professional diligence and materially distorts, or is likely to distort, the economic behaviour of the average consumer with regard to the goods or services supplied or intended for the consumer. Where the practice is addressed to a defined group of consumers, assessment is made by the economic behaviour of the average member of that group.
The law particularly protects vulnerable groups: where a practice is likely to materially distort the behaviour only of a group made especially vulnerable by mental or physical incapacity or age, the average member of that group is taken into account. At the same time, a practice is not regarded as unfair if the information in an advertisement is merely exaggerated or is not to be taken literally by its direct meaning. Unfair commercial practice is regarded as comprising misleading or aggressive commercial practice.
How the Agency's Study Begins
The grounds for starting a study are defined by law. An applicant has the right to submit to the agency an application concerning a suspected violation of consumer rights. The agency begins studying the fact if it has information that, as a result of the actions of a specific person or persons, the right of a group of consumers is being or may be violated. Overall, the basis for the study is a reasonable assumption that, in breach of the law's requirements, the interests of a group of consumers will be or may be harmed.
For business this means that a study may be launched both by a consumer's application and on the agency's own initiative. Readiness therefore means not only reacting to an inspection but having a well-ordered commercial practice in advance: documenting correspondence, advertising and sales processes, so that at any stage compliance with the requirements of professional diligence can be demonstrated.
The Fine and Its Conditions
The sanctioning norm of the law attaches to non-performance or improper performance of the agency's decision: in such a case a fine is imposed on the trader. The amount of the fine may not exceed 2 per cent of the trader's annual turnover in the previous financial year and may not be less than 600 lari. Where the turnover for the previous financial year cannot be calculated, the fine is determined from the turnover of the period from the trader's foundation to the fining — again with the minimum of 600 lari.
In determining the amount, the nature, severity and duration of the violation must be taken into account. Where the trader commits the violation repeatedly within 12 months, it is subject to a fine in double the amount of the imposed fine. A separately regulated case is the failure to supply information to the agency within the established period or supplying it incompletely: the fine is then 500 lari, and on commission of the same act within 1 year of the fining — 1 000 lari.
Two practical rules also matter: the imposition of a fine does not release the trader from the obligation to perform the agency's decision, and the payment period is 1 month. The fine is paid into the state budget, and if unpaid it is immediately sent for enforcement. This means that the fining is not the end of the dispute — the performance of the main decision remains the trader's obligation.
Frequently Asked Questions
What is an unfair commercial practice?
A practice that contravenes the requirements of professional diligence and materially distorts, or is likely to distort, the economic behaviour of the average consumer. It operates through misleading or aggressive forms and is prohibited by law.
How does the agency's study begin?
By an applicant's application or by information held by the agency; the basis is a reasonable assumption that the interests of a group of consumers are or may be harmed.
How much is the fine?
Up to 2 per cent of the previous financial year's turnover, but not less than 600 lari; on repetition within 12 months — in double the amount. For failure to supply information — 500 lari, and on repetition — 1 000 lari.
Does the fine release from performing the decision?
No. The fining does not release the trader from the obligation to perform the agency's decision; the sum must be paid within 1 month into the budget.
How We Help on Legal.ge
A dispute with the agency demands exact knowledge of both the sanctions and the procedure. On Legal.ge we help form your position at the study stage, verify the amount of the fine and appeal the decision. Contact us — we will handle your case under the law's exact norms.