An interview with the head of the Competition Agency George Baramidze
What methods will identify a monopoly on the market and how they will be fined? Do you know the details of the procedures?
The competition law does not speak of monopoly but of the abuse of a dominant position on the market. And this statement does not apply to all companies with a monopoly position in the market – especially if they reached their position legally and do not use it for illegal purposes
The only area which doesn’t need special studies is natural monopoly. And only after the issue is studied, it will be possible to talk about its existence in other sectors of the economy.
Dominance on the market is quite different. Dominance is a position that gives the company the ability to dictate prices in the market and restrict competition.
If there are no abuses, control of at least 40% of the market by one company can be considered as dominance on the market.
All these questions will be explored on the basis of a regulation on the methods of market analysis underthe competition law.
There is another issue on which there was a stereotype in society – it’s a relation between a dominant position and fining, whereas the decisive factor is an abuse of a dominant position. That is what is being studied and the Competition Agency’s basic procedures are focused on this.
This is a complicated question and the research can take months, all stakeholders, including representatives of business entities suspected of abuse, should be involved in studying the topic.
As for the penalty, in the first case it will make up to 5% of a company’s turnover, in the second – up to 10%.
On what basis will companies be examined?
According to the anti-monopoly law, the study can be carried out both on the basis of complaints from citizens or business entities and on the Competition Agency’s initiative.
If the study shows that the abuse of a dominant position takes place on the market, the Agency must decide within its powers.
Which segments of the market do you intend to study primarily?
The Agency can examine all areas of the economy where there will be proved suspicions.
At this stage, we do not say in advance what sectors of economy are planned to be checked, as it is necessary to take into account the society’s increased interest that can harm the process.
Are businessmen obliged to provide the Agency with information on their activities? And if they face a fine if they refuse to do this?
First of all, companies are required to provide information to the State if the merging is planned, whichcan lead to a monopoly. In this case, the refusal to cooperate will make the merger illegal, and the new economic entity will not be registered.
In addition, during the study the competition office may require information through the court. After the court decision is made, and the Agency receives the legal basis, the refusal to provide information is punishable by fines of GEL 1 000- 3 000.
Will the Agency have the right to fine the company, or its powers are limited only by recommendations?
In a case of violation of the law, the Agency has the right to impose a fine on the offender, it will be a common administrative law act.
In the case of violation on the market, the Agency is also required to develop recommendations for the state and business companies.
And besides, the Agency has also the right to sue the offending company.