Logo

Legal and Practical Aspects of Cartel Detection and Prevent

11.png
Davit Basiashvili

Doctor of Economics (PhD), Professor

22222.png
Slava Fetelava

Doctor of Economics (PhD), Associate Professor at Grigol Robakidze University

Abstract

The work deals with the practical aspects of cartels, both the legal regulation of actions restricting competition and their detection and prevention. Emphasis is placed on the role and importance of competition law in assessing the total economic damage caused by the disregard of competition law by economic agents in the relevant markets and the concerted actions of cartels. The discussion for horizontal (agreement/concerted action between competing economic agents operating in the same product market) and vertical (agreement/concerted action between non-competing economic agents operating in different product markets) cartels is carried out. It is also mentioned that the agreement between the competing economic agents, on the one hand, can reduce, eliminate, or strengthen the competition. However, on the other hand, individual agreements can increase the effectiveness of competition. As for vertical agreements, such an anti-competitive act may occur when a dominant producer/service economic agent offers products/services under preferential conditions to a participating seller/service-receiving economic agent, while discriminating against other economic agents. However, it is also a fact that such an action creates a risk of restriction of competition only if the parties to the agreement (separately or taken together) occupy a dominant position and have market power.In the research, an important place is given to international and local legal mechanisms for detecting cartels, and advanced foreign and Georgian practices are presented in this regard. Finally, the conclusion is made that, in order to detect and prevent concerted actions, the provisions included in the competition law in force in Georgia today (detection and prevention of cartels as actions restricting competition) are in full compliance with advanced international practice and, first of all, with similar norms of the EU countries. However, it is also clear that in the background of the development of contemporary digital technologies, when the specifics of the work of many companies are rapidly changing, which diversifies the ways of making concerted commercial strategic decisions - making the issues of detection and detection of concerted actions by competition agencies even more noteworthy. In this direction, the enforcement institutions of the competition of Georgia, as The Agency of Competition and Consumer Protection of Georgia as well as the supervisory bodies of the regulated sector (enforcing the competition legislation in the regulated sector) will have to make more efforts.

Keywords: Cartel, Agreement, Terms of Trade, Restriction of Competition, Sanction, Pricing Algorithm, Agency, Regulated Sector, Business Environment

References

  1. Gogiashvili Sh., Fetelava S., Agreement between non-competing entrepreneurs, a collection of scientific works of Paata Gugushvili Institute of Economics of TSU named after Ivane Javakhishvili, dedicated to the 100th anniversary of academician Avtandil Gunia's birth ((In Georgian Language), Tbilisi, 2012 , p. 127-141.
  2. Gogiashvili Sh., Fetelava S., Agreements of Competing Economic Agents ((In Georgian Language), Journal ,,New Economist”, 2012, №2, p.7-10.
  3. Lortkifanidze R., "Theory of perfect competition",Scientific Researchers Group to Strengthen UN and INTERPOL, TBILISI, 2024,
  4. https://dx.doi.org/10.13140/RG.2.2.26544.98567
  5. Fetelava S., Theory of competition and antimonopoly regulation in Georgia (In Georgian Language), ,,Loi”, Tbilisi. 2007, p. 189,
  6. https://dspace.nplg.gov.ge/bitstream/1234/6152/1/Fetelava_Slava.pdf
  7. Fetelava S., Janjgava J., 2023. State Aid: Defects, Ways of Regulation. DOI: 10.36962/NEC18022023 https://www.researchgate.net/publication/373359081_STATE_AID_DEFECTS_WAYS_OF_REGULATION
  8. Fetelava S., Economic Fundations of Competition. The New Economist, 3-4 (2019), vol 14, Issue 2, https://neweconomist.com.ge/journal/article/konkurenciis-ekonomikuri-sapuZvlebi-1594468243
  9. Explanatory dictionary of competition terms (compilers: Keti Zukakishvili, Keti Lafachi, Yueate Soviene, Liana Japaridze), second edition, (In Georgian Language), Tbilisi, Georgia, 2023, UDC 330.342.141, K-731.
  10. Georgian Competition and Consumer Protection Agency, 2023 activity report, (In Georgian Language).
  11. DIRECTIVE 2014/104/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union,
  12. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0104
  13. UNLAWFUL TRADE COMBINATIONS IN HISTORY Thomas W. Shelton American Bar Association Journal, Vol. 12, No. 2 (FEBRUARY, 1926), pp. 123-128 (6 pages) https://www.jstor.org/stable/25709475 Contribution from American Bar Association
  14. OECD (2017), Algorithms and Collusion: Competition Policy in the Digital Age www.oecd.org/competition/algorithms-collusion-competition-policy-in-the-digital-age.ht
  15. https://en.wikipedia.org/wiki/Cartel#:~:text=The%20Italian%20word%20became%20cartel,prisoners%20from%20the%201690s%20onward.
  16. https://competition-policy.ec.europa.eu/document/download/b19175c3-c693-410b-b669- 27d4360d359c_en?filename=cartels_cases_statistics.pdf
  17. https://www.linkedin.com/pulse/competition-law-roman-era-in-depth-look-antitrust-laws-parimal-wagh
  18. https://en.wikipedia.org/wiki/Edict_on_Maximum_Prices
  19. https://en.wikipedia.org/wiki/Mitchel_v_Reynolds
  20. https://en.wikipedia.org/wiki/Nordenfelt_v_Maxim_Nordenfelt_Guns_and_Ammunition_Co_Ltd
  21. https://www.govinfo.gov/content/pkg/COMPS-3055/pdf/COMPS-3055.pdf
  22. Horizontal agreements and cartels in competition law, Frank Wijckmans & Filip Tuytchaever, Oxford 2015. P. 8
  23. Case COMP/C.37.750/B2-Brasseries Kronenbourg, Brasseries Heineken
  24. Case T-240/07 Heineken Nederland BV, Heineken NV
  25. www.gcca.gov.ge

The New Economist N 2-3 (2024), Vol. 19, Issue 2

pdf
Published Date:

12/09/2024