GILS Antitrust law: Georgia
GEORGIA
1. Is the mandatory merger control regime in force in Georgia?
The laws of Georgia prescribe a mandatory concentration control regime.
2. Which authority is responsible for the merger control regime in Georgia?
LELP Georgian Competition and Consumer Agency.
3. What is the definition of concentration?
The law of Georgia does not define the definition of 'concentration,' but it specifies the methods/types for its implementation. Detailed information on these methods/types is provided in Issue 5.
4. Is pre-merger filing or post-merger filing required?
The notification obligation for concentration participants arises prior to the entry into force of the relevant agreement and/or the actual implementation of the concentration (including before registration with the registration authority).
If the control is obtained through more than one transaction, during a continuous 2 (two) calendar year period, the obligation of notification for the person/persons acquiring the control arises prior to the last transaction. In such cases, the combination of these transactions is considered a concentration, and it is considered implemented by the execution of the last transaction.
5. Examples of key concentration types caught by merger control rules in Georgia.
The types of concentration are:
a) The merger of two or more independent economic agents, resulting in the formation of a single economic agent;
b) The acquisition of direct or indirect, total or partial control over one or more economic agents through the purchase of securities or shares, contracts, or other means by one or more economic agents, or by one or more persons who, for the purposes of this law, are not considered economic agents but who already control at least one economic agent;
c) The creation of a joint venture, if it performs all the functions of an independent economic agent for a long time.
6. What are the notification thresholds, which a concentration must trigger for a merger control filing to be required?
A concentration must be notified to the Agency if the aggregate annual income of its participants in the territory of Georgia, as reported for the preceding financial year in which the notification obligation arises, exceeds GEL 20 million and, at the same time, the annual turnover of each of at least two participants in the concentration exceed GEL 5 million.
In the case of a concentration involving an individual registered during the year of the concentration, the annual income reported at the time of the concentration notification within the current calendar year shall be considered.
7. Does the authority have any discretion to review transactions that do not meet the notification thresholds?
The Agency is authorised, based on information disseminated through mass media and/or received from any source, on its own initiative to examine the issue of an implemented concentration, determine whether the concentration was subject to notification to the Agency and take appropriate measures as prescribed by the law. The agency will consider the issue within one month. If necessary, based on a reasoned decision, the agency is authorised to extend the review period for an additional two months.
8. Do the merger control rules apply to foreign-to-foreign transactions taking place outside Georgia?
For the purposes of this rule, the joint income of the participants in the concentration shall be calculated based solely on the income earned by these entities within the territory of Georgia.
9. Are there specific merger control rules relating to the notification thresholds (e.g., specific merger control notification thresholds for specific sectors; different rules to calculate turnover for specific industry sectors such as banks and insurances or retail, specific rules relating to foreign subsidies, companies, etc.)?
Georgian law does not stipulate different concentration notification thresholds for particular sectors, nor does it prescribe differing rules for calculating turnover across specific industry sectors.
10. Whether Georgia requires the payment of filing fees and if yes, when?
The fee for consideration of the notification by the Agency is GEL 5,000, irrespective of the number of parties involved in the concentration or whether the notification is submitted by a single representative or multiple representatives.
The Agency will commence consideration of the concentration notice on the next working day following the submission of the document confirming payment of the consideration fee. Should the document confirming the payment of the fee not be submitted, the notification will not be considered by the Agency.
If, following the payment of the notification review fee, it is determined that the notification is not subject to review by the agency, the fee shall be refunded to the relevant person.
11. Whether there is a filing deadline in Georgia requiring a notification to be filed within a certain period of time following a particular transactional event (e.g., signing a share and purchase agreement)?
The law of Georgia stipulates the required moment/period for notification but does not define a specific term in days or months. For instance, notification must be made prior to the relevant agreement coming into effect. Please see Issue 4 for detailed information.
12. What information and documents must be disclosed or provided to the authority for the purposes of merger clearance?
The notification must be submitted to the Agency, duly approved by the Chairman of the Agency, in a fully completed annex, either in written or electronic form. The annex should include the following information:
a) General information about the participants in the concentration (Name of the economic agent or individual, Identification number or personal number, Legal address, Field of activity, Contact person and their email address and Telephone number);
b) Form and purpose of the concentration;
c) Characteristics of the participating entities;
d) Detailed description of the concentration.
The notification should also include information on:
a) The volume of main goods and services produced, purchased, and sold by each party participating in the concentration during the last financial year, categorised by assortment;
b) Data for the last financial year concerning the main suppliers and purchasers/customers of each party involved in the concentration.
13. What are the time periods within which the authority must reach a decision on the merger clearance? Is any fast track or simplified procedures available?
The agency is required to review the notification within 25 working days following the submission of a complete notification and the accompanying document confirming payment of the fee. The agency may request additional documents; however, the time required for submitting these documents does not count towards the 25-day period.
If the agency has reasonable grounds to suspect that the concentration may be incompatible with the competitive environment, or if the case's complexity warrants it, the agency may extend the review period. In such instances, the agency shall complete its review within 90 days of the extension.
There are no other fast track or simplified procedures available under Georgia law.
14. What are the penalties which the authorities may impose for "failure to file" or "late notification"?
The person with the obligation to submit the notification shall be imposed a fine not exceeding 5% of its annual Income during the preceding financial year of the Agency's decision:
a) in case of non-submission of the concentration notification to the Agency;
b) in case of exercising concentration despite the negative decision of the Agency and/or before the expiration of the notification period or before the issuance of the decision by the Agency.
The imposition of a fine for the failure to submit a notification of a concentration does not exempt the person from the obligation to submit the required notification to the Agency. Concurrently with the imposition of the fine, the Agency shall set a deadline for submitting the notification in each specific case, which shall not be less than 14 calendar days.
In parallel with the imposition of the fine, the Agency shall apply to the court to request the annulment of the concentration and restoration of the original situation if:
a) There is a decision from the Agency declaring the planned concentration inadmissible;
b) The Agency determines that the concentration was implemented in a manner that circumvents the legislation and deems it inadmissible.
15. Have there been any recent developments regarding the merger control regime in Georgia?
In 2020, significant and essential changes were introduced to the law regarding the concentration control regime. Additionally, the procedure for the submission and review of notifications regarding concentration was established in the same year.
Amendments related to specific issues in the aforementioned rule and law were also made in 2023-2024.
Author: Nino Sabanadze