Through the Association Agreement with the EU, Georgia has committed to aligning its competition law with European standards. One of the central concepts in this legal field is the definition of undertaking, which determines the scope of enforcement and liability under competition law.
Two Approaches to Defining an Undertaking
- The Institutional Approach
This traditional model defines an undertaking based on its legal form and structure. Once applied in early EU cases, it has largely been set aside due to its inability to reflect economic realities. - The Functional Approach
Now dominant in EU competition law, this approach defines an undertaking by its economic activity rather than legal form. Georgian legislation adopts this method but limits it to entrepreneurial activity, narrowing its scope compared to the EU’s broader interpretation.
The Single Economic Entity Doctrine
The paper also examines the Single Economic Entity Doctrine, which treats parent and subsidiary companies as a single undertaking when there is no genuine autonomy in decision-making. This doctrine has substantial implications for assessing liability in competition law violations.
Conclusion: A Call for Broader Reform
The study concludes that for Georgia to effectively enforce competition law, the definition of undertaking must be broadened to include all entities engaging in economic activity, even those not pursuing profit, in line with EU practice.
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