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Giorgi Barabadze
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Competition Agency Enables Society to Make Realistic Conclusions on the Agency Performance

The oil products market, grains imports, the Black Sea ports, coffee market, lawbreaking in state tenders and the revenue service – these directions represent a small part of the cases the competition agency has been exploring.

The competition agency head Giorgi Barabadze updated the IPress on the year on year  performance. “Our job and specific cases enable the society to make realistic conclusions on the agency performance”, Giorgi Barabadze told the IPress.

– Mr. Giorgi, what principles does the agency follow to choose this or that commodity market for examination?

– The legislation promulgates three variants: 1) application; 2) appeal and 3) the agency’s initiative. There are several issues on which companies have applied to us and we have launched examining these issues. There were issues that we started examining by our own initiative, including the oil market examination. There are markets that are being monitored, including the coffee market. The oil products market inspection started because of the sharp public interest. We also follow other parameters. We watchdog the markets to identify the available risks. Each case is an individual one and each commodity market contains its own characteristics peculiarities.

– The information was spread as if the agency requested the right for carrying out searches in business companies, but you refused any plans for making similar amendments to the legislation, but you confirmed the agency commissions were to be refined. What specific job is being carried out?

– There are certain details in the competition agency legislation. For instance, EU and World Bank (WB) representatives have expressed remarks in relation to schedules. The legislation sets a 2-month period for amalgamation, and this term should be extended. The administration methods should be improved. For example, two bodies are obliged to notify me on amalgamation, but if they ignore this obligation, there is no regulation what I must do, what kind of sanctions and fines must be imposed. There are many similar gaps in the legislation.

– Is the business sector ready for active cooperation with the competition agency?

– I confirm we provide valuable cooperation. In the oil products market inspection process, we had close cooperation. In this case the issue was very extensive in itself. We have examined a 10-year period with huge materials and information.

-What scheme does the report talk about that proves the cartel collusion?

-The legislation obliges me to prepare a small annotation with 2-10 pages for each case by keeping confidential information secret. I cannot divulge the information on how many Tetris the companies were earning from a liter of fuel. If the court declassifies the case, then we will be able to divulge the classified information to a certain extent. The court is probing into the case and it will not be expedient that we divulge the details. We should wait for the court decision.

– What are the criteria to determine the amount of fines and why was a different amount of fines imposed on various companies?

– The fine is calculated due the company’s financial turnover of the previous year. Their financial turnovers are different and their fines are determined in this way. I would like to stress we have not applied maximum measures and sanctions. The first case is fined by 5%, the second case is fined by 10% of the turnover.

The competition agency does not aim to persecute the private business and set an exhaustive anonymous control. Our goal is to improve the current situation in the market so as all market players have opportunity for simple operation. We do not want that our sanctions stifle companies, close them or something similar. Erroneous public opinion was created regarding the competition agency mission. Our mission is not to annihilate someone and our sanctions prove this strategy. We have not applied maximum sanctions, but they correspond to the law infringement degree. This is a standard in any European country. All lawbreakers must be called to account and we verify whether their activities contain law infringement signs.

– Did you expect the case would have been appealed to the court?

– Everybody is entitled to protect own interests at court and this is one of the attributes of any country. We have prepared a report proving the existence of law violations. And the companies were entitled to apply to the court. Now it is upon the court to take a decision. I am sure we are right.

-After the oil products market examination, there were many considerations about the next target field. The pharmaceutical market was named among one of the most relevant directions. Will the competition agency explore the pharmaceutical market?

– We prioritize those 6-7 cases that we are exploring and the report will be prepared within the legal schedules, that is, in 3-10 months. After these terms the competition agency will probe into all commodity markets in which our society shows much interest, including the pharmaceutical market or other direction. It is untimely to divulge everything in advance, because there are certain risks that may hinder the commodity market examination process. Our society will receive comprehensive information as soon as we start examinations in this or that field.

I cannot either confirm or refuse this information preliminarily. All investors will be frightened seeing the competition agency chairman makes ungrounded statements without preliminary research. We should treat the business sector carefully and skillfully. We try to make reasonable, balanced and thoroughly explored statements. Every my statement or statement of the agency may bring very negative results to the state economy and the business sector.

– How often do business companies apply to the agency for exploring specific markets?

– We have received many similar applications, including against the revenue service and we have fined it, as well as against state tenders. By the way, the revenues service appealed to the court against our decision. Legal dispute between two state offices brought positive reactions in both media space and the society. One state service was accusing another of violating the business sector interest.

– Is the Georgian market free and attractive today?

– There are all conditions and we do our best to this end. There are no restrictions in this respect. On the contrary, we welcome investors. Georgia provides one of the simplest mechanisms in terms of doing business. We can boldly confirm this. We offer valuable and healthy competitive environment to investors. This is our mission.