Antitrust Compliance: What the Law Requires of Your Business
Antitrust compliance means keeping your business inside the boundaries set by the Georgian Law on Competition: not abusing a dominant position, refusing competition-restricting agreements, and observing the rules governing concentrations. This page is built on the individual articles of that law and shows you where the risk is highest and how to avoid it.
The article on the authorized organ identifies the enforcer: the organ empowered to enforce the requirements of the law is the independent public-law legal entity established on its basis — the Georgian Competition and Consumer Protection Agency. In addition, in cases provided for by the law, this competence is exercised by the regulator of a regulated sphere of the economy. The practical implication for you: if you operate in a regulated sector, you will also deal with the sector regulator on competition matters.
Dominance and the Ban on Its Abuse
The law provides that dominance is determined on the relevant market taking into account the market share of the economic agent, the market shares of its competitors, barriers to entry into the market, barriers 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 determining market power. The agency determines the market share and market power of an economic agent using methodological guidelines for market analysis, which it adopts by an appropriate legal act.
The practical conclusion follows: dominance is not measured by share alone. Even with a modest share, high entry barriers or vertical integration may prove decisive in the assessment; conversely, a company with a large share may not be regarded as dominant because of active competitors. A compliance programme should therefore rest on a real analysis of the market, not merely on sales statistics.
Under the corresponding article, abuse of a dominant position by one economic agent or several agents (in the case of collective dominance) is inadmissible. The law names the acts that may be considered abusive:
- imposing, directly or indirectly, an unfair purchase or sale price or other unfair trading conditions;
- limiting production, markets or technological development to the detriment of consumers;
- applying dissimilar conditions to equivalent transactions with certain trading partners, thereby placing them at a competitive disadvantage;
- making the conclusion of a contract subject to acceptance by the other party of supplementary conditions which, by their nature or according to commercial usage, have no connection with the subject of the contract.
Note what is prohibited: not dominance itself but its abuse. A company holding a strong market position may compete legitimately, but its freedom to set prices and conditions is constrained — particularly regarding discrimination between partners and conditions unrelated to the subject matter of deals.
Restrictive Agreements and the Efficiency Exemptions
Another article prohibits agreements between economic agents, decisions of associations, and concerted practices whose purpose or effect is the restriction of competition on the relevant market. The prohibited forms named by the law include direct or indirect fixing of purchase or selling prices or other trading conditions; limiting production, markets, technological development or investments; sharing markets or sources of supply; applying dissimilar conditions to equivalent transactions; and imposing unrelated supplementary conditions. Such agreements are void unless the exemptions established by the law apply to them.
The exemptions are regulated separately: the prohibition may not be applied to agreements that contribute to improving production or supply and to technical-economic progress and ensure growth of consumer welfare — provided the agreement does not impose restrictions unrelated to the attainment of those objectives and does not allow the participants to eliminate competition on a substantial part of the relevant market. Justifying those circumstances is the burden of the economic agents themselves, while block exemptions tied to specific types of agreement are established for a defined period by a normative act of the Government of Georgia.