For immediate release

Tbilisi, March 12, 2014 – Transparency International Georgia has published its new report  "Competition Policy and the Competition Regulatory Authority in Georgia”. The report examines the existing institutional framework of competition in Georgia and the measures carried out by the "Georgian Dream" Coalition since coming to power. It also provides specific recommendations which the government needs to consider in order to implement effective competition policy.

Key Findings:

• The Competition and State Procurement Agency (CSPA) has been unable to effective exercise oversight of competition for more than a year now. To date no cases of unlawful restriction of competition on the market or of violation of Georgian competition law have as yet been investigated or initiated by the Competition and State Procurement Agency.

• The Agency's activities have been hindered by the Georgian Government's failure to enact secondary legislation set by the Law on Free Trade and Competition in order for the Agency to implement the Competition Law;

• The delaying of the implementation of competition policy reform has put business in a standby mode, whereas the expectation of changes in institutional environment has an adverse effect on investment decisions and creates unfavorable environment for business activities, which also has a negative impact on the country's economy as a whole.

• The EU - Georgia Association Agreement, initialed during the 29 November Eastern Partnership Summit, also highlights that the parties shall maintain in its respective territory comprehensive competition law which effectively address anti-competitive agreements, concerted practices and anti-competitive unilateral conduct of enterprises with dominant market power and authority responsible and appropriately equipped for the effective enforcement of the competition laws.

Recommendations

Transparency International Georgia believes that, in order to ensure effective state oversight of competitive environment and support free  and undistorted competition on the market, as well as to increase the compatibility of the Georgian and the EU markets, the Georgian authorities should take into consideration the following recommendations:

• Competition legislation must be amended to address the gaps of the current institutional framework for competition. The Government of Georgia must initiate the draft Law on the competition policy reform in the Parliament of Georgia in a timely manner, while Parliament must establish the institutional basis for this reform;

• Competition policy must be coordinated and the independence of the Competition and State Procurement Agency must increase. The Agency should be authorized to independently start investigating any market, provided that signs of restriction of competition in this market exist and the structure and characteristics of the market requires intervention of the competition regulatory authority.

• Respective exceptions envisaged by the competition legislation framework (in particular, by the Law on Free Trade and Competition) must not create the possibility of eliminating competition with respect to substantial part of the products in question.

• One of the key tools of struggle against anti-competitive practices by economic agents on the market – the “Leniency Program” – must be developed and implemented in the Georgian legislation.

See the report for more detailed findings and recommendations.

The report was prepared with financial support from  the Swedish International Development Cooperation Agency (Sida).