What is concentration?

The concentration is:

1. A) a merger of two or more independent undertakings , resulting in the formation of oneundertaking;
2. B) gaining direct or indirect, full or partial control over one or more undertakings through the purchase of securities or interests, or through an agreement or otherwise;
3. C) Establishment of a joint venture if it has been performing all the functions of an independent undertaking for a long time.

What kind of concentration is not allowed?

The concentration, which distorts effective competition in the energy market of Georgia, its part, or any party of the Energy Community, is not allowed,

If a concentration gives rise to or enhances a dominant position, it is presumed that such a concentration restricts effective competition in the relevant market unless the concentrating undertaking/water supply licensee proves otherwise.

What is concentration control and how is it carried out?

Concentration control is a legal mechanism that allows the regulator to assess in advance, prior to the operation, the effect of the planned concentration on the competitive environment.

Concentration control is carried out through submitting notification according to the law by the undertakings participating in the concentration, reviewing it by the Commission, and concluding a relevant decision.

In what cases is it mandatory to submit a concentration notification?

It is mandatory to submit a notification on the concentration if the joint annual turnover of the undertakings/water supply licensees participating in it on the territory of Georgia and/or on the territory of any party of the Energy Community exceeds 20 mln GEL and, in addition, the annual turnover of each of at least two undertakings/water supply licensees participating in the concentration exceeds 5 mln GEL.

Who is exempt from the obligation to notify the concentration?

The licensee in the water supply sector participating in the concentration, who is not directly or indirectly related to the energy market participant/energy activity, is exempted from the obligation to submit a notification on the concentration.

Who will submit the concentration notice?

A notification of concentration is submitted by:

1. A) the acquirer and/or the person gaining control - in case of purchasing of securities or interests, gaining control through an agreement or otherwise;
2. B) all participants of the transaction, by submitting a joint notification - in case of merger/consolidation;
3. C) all participants in the transaction, by submitting a joint notice - in case of establishment of a joint venture.

Sanctions

Failure to comply with the requirements of the legislation on concentration control will result in fines for the undertakings/water supply licensees under the Law of Georgia on Competition.

In case of concentration with violation of the requirements of the law, the Commission, in addition to imposing a fine, requests the cancellation of the concentration to restore the original state.

If it is impossible to restore the pre-concentration situation by revoking it, the Commission is entitled to take any other appropriate measures to return to the pre-concentration situation to the most extent.