Unfair Commercial Practices in Georgian Law
In Georgia, unfair commercial conduct is primarily an institution of competition law. The governing framework is the Georgian Law on Competition, whose relevant provision directly prohibits unfair acts by economic agents. To understand the boundaries of this page, one point must be stated plainly at the outset: a separate consumer-protection regime governing business-to-consumer unfair trading practices is not part of the legal basis assembled here, and this page is therefore grounded in the competition-law prohibition. Likewise, the European Union directive on unfair commercial practices is a foreign legal instrument with no application to Georgia — it is mentioned here only as comparative context, never as an operative norm.
The definitions article of the law explains the key terms on which the prohibition rests. An economic agent is a natural person, legal person, other association or union carrying out economic activity, regardless of residency or legal form. A competitor is an economic agent actual or potential on the relevant market. The relevant market is the sphere of circulation of goods or services on a defined territory, and it may cover the whole territory of Georgia, a part of it, or a part of it together with a part of another country's territory. The same article defines the applicant and the complainant — the two categories of persons entitled to approach the agency.
The Prohibition and the Two-Element Test
The first part of the prohibition article states the rule in one line: unfair competition is inadmissible. Although brief, this formula carries the entire regulatory weight, and its violation engages the sanctioning provisions of the same law.
Under the second part of that article, unfair competition is deemed to be any act of an economic agent that contradicts the norms of business ethics and infringes the interests of a competitor and of consumers. The concept therefore contains two elements: the act must contravene business ethics, and it must harm the interests of both a competitor and consumers. The law introduces its list of examples with the word „for instance”, which means the enumerated forms are illustrative rather than exhaustive — what matters in practice is that both elements of the concept are present.
Which Acts Are Prohibited
The second part of the prohibition article singles out seven typical forms of unfair competition. In practical terms, this list is the legal basis on which applications and complaints to the agency are drafted:
- transmitting, by any means of communication — including improper, unfair, unreliable or blatantly false advertising — information about goods or services that creates a misleading impression in the consumer and pushes the consumer toward certain economic action;
- concealing the true purpose of a deal in order to mislead the other party and thereby gain an advantage in competition;
- harming a competitor's reputation by creating a false impression about the enterprise, its products, its entrepreneurial or trade activity, including unfounded criticism or discreditation;
- appropriating the form, packaging or external appearance of a competitor's or a third person's goods;
- acquiring, obtaining, using or disseminating scientific-technical, industrial or trade information, or a commercial secret, without the consent of its holder;
- bribing a purchaser, a supplier, their employee, or a person empowered to take decisions, so that they act against the employer's interests or disregard consumers' interests;
- calling for a boycott.
Each of these forms is not an abstract moral judgment but a specific legal prohibition whose violation becomes a matter for the agency. In practice, the misappropriation of commercial secrets and the discreditation of competitors are among the most frequent scenarios, which makes timely documentation and evidence collection decisive.
Who May Approach the Agency
The law distinguishes two different forms of approach. The right to file a statement belongs to the applicant — a person who has information or evidence of a substantial violation of the competition legislation but who does not directly suffer property damage as a result. The applicant is not considered a party: the agency accepts the statement as a notification and, where reasonable suspicion exists, may use it to open an investigation on its own initiative.
The right to file a complaint belongs to the complainant — an economic agent who considers that, as a result of the violation, it directly suffers property damage. The complainant is treated as a party, must submit evidence together with the complaint, and bears the burden of proof. Choosing correctly between these two forms determines your procedural standing before the agency.
The Complaint Procedure and Defence Guarantees
A dedicated article of the law regulates how complaints are handled. After receiving a complaint, the agency examines the question of its admissibility within a period established by Georgian legislation. The agency is obliged to forward the complaint to the respondent economic agent, and the respondent is entitled to submit its own views within a deadline set by the agency. On the basis of the information supplied by the complainant and the respondent, the agency decides whether to open an investigation and notifies both sides of that decision.
An important defence instrument is the conditional undertaking: at the admissibility stage, the respondent may offer to assume an obligation to carry out concrete actions aimed at eliminating the suspected violation. If the agency agrees, and if fulfilment of the undertaking removes the reasonable suspicion, the agency refuses to open an investigation and sets a deadline for performance. If the undertaking is not performed within the deadline and in the manner defined, the admissibility examination resumes and the running of the relevant period restarts. The form of the complaint, the submission procedure and the admissibility-related procedures and deadlines are determined by an act of the agency.
Fines and the Criteria for Setting Them
The sanctioning article prescribes the following: where a violation of the prohibition of unfair competition is confirmed, the economic agent is fined an amount that must not exceed 1 % of its aggregate turnover of the previous financial year preceding the adoption of the relevant decision by the agency. If the legal basis of the violation is not eliminated, or if the violation is repeated, the fine rises to up to 3 % of aggregate turnover. Because the sanction is tied to turnover, it can reach substantial amounts for larger companies.
When setting the amount of the fine, the damage caused by the violation, its duration and its severity must be taken into account. The imposed fine must be paid into the state budget of Georgia within 1 month of imposition; otherwise it is referred for enforcement in the manner established by Georgian legislation.
How Our Lawyers Can Help
Unfair competition cases demand a precise command of both the conceptual apparatus and the rules of evidence: demonstrating the contravention of business-ethics norms together with harm to a competitor's and consumers' interests is not a formal exercise. Our team will help you assess the facts of your situation legally, prepare a statement or a complaint, shape the respondent's position, and formulate a conditional undertaking where that route protects you best.
If your competitor uses blatantly false advertising, copies your packaging, spreads your commercial secrets, or has bribed your business partner — or, conversely, you find yourself in the respondent's position before the agency — timely legal response significantly reduces both damage and exposure to fines. Contact us through Legal.ge for recommendations tailored to your specific situation.