The Serbian competition authority published its decision on resale price maintenance (RPM) by Polet-keramika, a company operating within the ceramic tile sector in Serbia.
Polet-keramika was fined 0.4% of its annual revenue for imposing minimum resale prices on its distributors through sale-purchase agreements. Namely, for over three years the distributors were recommended to set retail prices in accordance with Polet’s price list. The agreements expressly provided that in case of distributors’ non-adherence to the price recommendations, Polet “reserves the right to react in order to maintain market stability” and deny the distributor the so-called super rebates.
Commission’s assessment
The Commission deemed Polet’s setting of resale prices through agreements and rebates policy to be restrictive of competition within the meaning of Article 10 of the Serbian Competition Act. In particular, the Commission took the stance that maintaining and fixing resale prices is a severe infringement with an anticompetitive object, the effects of which do not need to be demonstrated. In several instances in the decision, the Commission emphasized that RPM is “always and without exception” an infringement by object that is prohibited per se:
“The agreement on fixing a minimum resale price belongs to the type of agreement that significantly disrupts competition and does not benefit consumers in any way. Consequently, regardless of the specific effects, which may not even come to light, such agreements are without exception null and void.
[T]he subject matter of the proceedings before the Commission is fixing of resale prices, which is always and without exception a “violation by object” whose negative effects are evident and therefore there is no need to prove the effects thereof.”[1]
“In such cases of competition infringements, there is no need to prove a significant anti-competitive effect, given that agreements establishing prices in further sales are in themselves prohibited.”[2]
The Commission addressed the effects of Polet-keramika’s conduct in question only to say that adverse effects of RPM in this particular case are reflected in preventing distributors from reducing their resale prices below the prices set by the producer, which is harmful for the consumers.
Comment to the Commission’s assessment
The latest RPM decision in Polet-Kermika case is in line with the long-lasting decisional practice of the Commission in which the authority has maintained that there is no difference between the concept of an infringement “by object” and a “hardcore restriction of competition”.
Even though in this particular case the facts support the finding of an infringement by object and the investigated party did not even raise the effects defense, the Commission’s repeated principled position that RPM is without exception an infringement by object does not align with Super Bock judgment, a newly established golden standard for RPM. As a reminder, ECJ held in Super Bock that RPM is not automatically a violation by object despite its characterization as a hardcore restriction under the Vertical Block Exemption Regulation. This ruling marks a shift from a previous formalistic approach towards a context-based approach that demands competition authorities to examine, inter alia, the economic and legal environment of an RPM agreement.
Conclusion
Even though the Serbian Commission confirms in its latest RPM decision that RPM is an infringement of competition by object, it remains to be seen whether, on a different factual underpinnings, the national authority would be ready to revise its practice and open the door for an effects-based analysis of an RPM agreement despite the fact that RPM clauses are not covered by the Serbian Vertical Block Exemption Decree.
[1] The Decision No. 4/0-01-151/2023-17 dated 16 October 2023, p. 29, 6. Available at Resenje-Polet.pdf (kzk.gov.rs).
[2] Ibidem, p. 5.
