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Antimonopoly Service –Watchdog of Georgia’s Business Sector

Published: November 19, 2012 | 8:54 am
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The bill on antimonopoly service is expected be presented at Georgia’s legislative body by the end of the year.

The COMMERCIAL TIMES

Georgia’s changed political climate has comes with new challenges and among them is the launch of the Antimonopoly service, which has long been awaited by the part of the local business sector.

After the elections the leader of the winner Georgian Dream Coalition Bidzina Ivanishvili started intensive works on restoring the antimonopoly service. As Ivanishvili was saying, the creation of this body is essential in order to prevent cartel agreements and don’t let government officials interfere in anybody’s property issues illegally. According to his earlier statement this would be an issue to be discussed as soon as the new parliament would begin working; however, the concrete date of the discussions around the subject is not clear yet.

As Vakhtang Khmaladze, the Chairman of the Parliamentary Committee of Legal Affairs, told The COMMERCIAL TIMES, antimonopoly bill has already been worked out and discussions are also planned. The bill may come in force by the end of the year.

Khmaladze noted, that the antimonopoly service must be independent and neither executive nor legislative bodies should have right to influence on it.

“Antimonopoly service must function independently, otherwise it will become useless,” said the Chairman of the Parliamentary Committee of Legal Affairs.

Irakli Matkava, Deputy Economy Minister, also expressed his views on this subject, said he’s not much competent though: “I’m not well aware of this issue. Generally, my opinion is that antimonopoly service should be independent.”

The topic of launching the antimonopoly service in Georgia was put on the table in 2008 when talks about intensifying free trade issues between Georgia and the European Union were activated. In return, Georgia took responsibility to fulfill certain tasks, one of the most important of which were the creation of a new labor code, defence of consumer rights and the establishment of a antimonopoly service.

Antimonopoly service in Georgia was abolished in 2005 because of the country’s liberal policy conduction. Later, its functions were granted to the Agency for Free Trade and Competition of the Ministry of economy and Sustainable Development of Georgia under the antimonopoly Service name.

 

Former Minister of Economic Development of Georgia Kakha Bendukidze was against restoring the antimonopoly service. He was claiming by then that when there are no monopolists in Georgia there’s no necessity to launch this body. In his words, it would be an unreasobable expenditure and a corruption source.

The COMMERCIAL TIMES contacted Bendukidze to get his comment around the subject, whether he still maintains his negative approach on launching antimonopoly service and in case it happens which country model would be more relevant for Georgia. However, he did not respond.

There is an opinion that the abolishment of the antimonopoly service made healthy competition vanish and that monopolists and cartel unions appeared on the local market. Thus, the restoration of the body became much spoken about, also reminding the fact that the EU was naming this issue among the top priority tasks for Georgia to accomplish in return to the Free Trade Agreement.

Kakha Kuchava, Partner at Eristavi Law Group, Board Memmber of ICC Georgia, CEO of the recently launched Georgian Institute of Directors, said the launch of the antimonopoly service in Georgia is necessary.

“I believe it’s necessary to launch the antimonopoly service. What matters most is that it should be really functional. To make this happen it’s essential to form a strong team, which will be focused on controlling different business sectors and will not allow the violation of rights of any company by larger and stronger players. When a country is committed to assist the development of small and medium size businesses, it’s necessary to have the antimonopoly service in order to prevent the violation of the rights of smaller players on the market,” commented Kuchava. “There are dominant companies in different sectors and it does not mean that this is illegal. The issue is how legally they achieved this large-scale status and how they use the current dominance. Each sector should be learned thoroughly and only then relevant measures can be taken.”

Part of Georgian businessmen support the idea of re-launching the antimonopoly service. Levan Chiteishvili, the Head of the Quality Management Department of Marshe positively assesses the initiative: “I think monopolies should be maximally prohibited in the small market like Georgia’s. The local food industry, where we do business, is more or less monopolized and this should be regulated.”

Georgia’s new government plans to launch the antimonopoly service along with creating liberal business environment. It’s important to see how the government’s minimal interference in the private sector will work in parallel to establishing a controlling body. Till the end of the year the bill on creating the antimonopoly service is due to be presented to the Georgian parliament. With this step Georgia fulfills another recommendation required by the EU, which could open the country the European market gate.

 

 

 

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