Through the Association Agreement with the EU, Georgia has committed to aligning its competition legislation with European standards. A key concept in competition law is the term undertaking, which determines the scope of competition enforcement. Unlike EU law, which relies on case law to define the term, Georgia has codified a legal definition within its competition legislation.
This paper examines two primary approaches to defining an undertaking:
- The Institutional Approach – Defines an undertaking based on its legal form and organizational structure. This approach, once used in early EU case law, has largely been abandoned due to its limitations.
- The Functional Approach – Defines an undertaking based on its economic activity rather than legal form. This approach, now dominant in EU law, is also reflected in Georgian competition legislation. However, the Georgian definition ties undertakings to entrepreneurial activity, limiting its scope compared to the broader EU concept of economic activity.
The study also explores the Single Economic Entity Doctrine, a principle that treats parent and subsidiary companies as a single undertaking if they lack independent decision-making autonomy. This doctrine plays a crucial role in determining liability and competition law violations.
The paper concludes that for Georgian competition law to be more effective, the definition of undertaking should be expanded to align with EU standards, encompassing all entities engaging in economic activity, not just those pursuing profit-oriented goals.
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