Competition law in Serbia in 2017: A Year in Review

A more vigorous and sophisticated approach of the Serbian competition authority to antitrust enforcement

In 2017, the Serbian Commission for the Protection of Competition (“Commission“) moved towards more effective antitrust enforcement. The Commission opened seven investigations and issued fines in five other cases. The average fine was in the proximity of 1% of infringer’s Serbian turnover.

Although the practice has constitutionality issues, the Commission continued to use dawn raids as a regular tool for collecting evidence. The authority performed two of them during 2017, based on the publicly available information.

The year behind us was also marked by qualitative improvement of the Commission’s analysis. The decisions contain elaborate economic analysis, while legal reasoning extensively relies on the EU law.

The Commission launched a retail sector inquiry, which is still pending. The Commission is expected to focus on the difference in the bargaining power between small and large retailers, the positions of suppliers, rebate policies and impact of private labels on competition.

The Commission established and strengthened cooperation with other competition agencies all over the world. The Commission also emphasised the importance of regional cooperation by initiating creation of the regional Western Balkans Competition Forum.

Finally, in the second half of 2017, the work on the new competition legislation has started.

Restrictive agreements


In Victoriaoil/Vital case, the Commission fined two out of four players on the market of oil products in Serbia for entering into an anticompetitive horizontal agreement. The most significant trait of this case is the use of regression analysis to assess counterfactual, i.e. the situation that would have existed on the Serbian market for refined consumable sunflower oil in the absence of the restrictive agreement (so-called “but for” test). Interestingly, in this case the Commission did not put special emphasis on the object/effect dichotomy. It merely found that the agreement did not contain by object restrictions of competition without elaborating on how it reached that conclusion. It then offered a detailed appraisal of the negative effects of the agreement on inter-brand competition on the relevant market.

Bid rigging cases

Fighting bid rigging in public procurement as hardcore restriction of competition law remains the Commission’s top priority. Four local companies active in the market for the overhaul of rail vehicles were fined for colluding the behaviour prior to submitting the bids. Economic evidence (statistical data, analysis of the prices offered in the disputed tender, and structural indicators of the market) were a starting point in the investigation of the suspected collusion. In this respect, the Commission heavily relied on the OECD document Ex officio cartel investigations and the use of screens to detect cartels 2013. It concluded that in the absence of the agreement, there would be no economically plausible explanation of the parties’ bids. However, the so- called “communication evidence” revealed in the course of dawn raids at the premises of three parties and indicating that there had been a meeting between the parties prior to the bid opening, was crucial for the authority’s finding of a restrictive agreement. The Commission fined each party in the amount of 2% of that party’s Serbian turnover in 2015, a year prior to opening of the investigation.

Two more bid rigging investigations opened in 2017 are still pending.

Resale price maintenance

The end of 2017 also saw the Commission’s decision fining distributors and retailers of sports footwear and sportswear for resale price maintenance at the wholesale and retail level. The Commission qualified RPM as infringement by object which does not require any showing of actual or likely anticompetitive effects on the market. For this reason, the Commission dismissed the defense that the restrictive agreement was not implemented in practice as immaterial for the assessment of the infringement.

Abuse of dominance

In Interturs case, the Commission fined a local company operating a bus station in central Serbia for excessive pricing. The Commission performed a costs analysis and compared price levels of identical bus station services in the same category of bus stations in Serbia. It concluded that the price increase imposed on bus operators affected passengers as end-users of the transportation services, because it triggered bus ticket price increase and caused operators to cut certain routes, thus reducing the consumers’ choice.

Bus stations have been under the Commission`s rigorous scrutiny since 2007, when the authority established that the Belgrade bus station abused dominant position by charging excessive prices for the bus station fees. In the last quarter of 2017, the Commission opened two new abuse of dominance investigations, against a bus station operator in northern Serbia, and against Niš ekspres, a vertically integrated bus station operator and intercity bus service operator in Niš (southern Serbia), both for the alleged price discrimination. Namely, bus station operators charged different bus station fees to passengers, depending on whether they were the company’s customers for bus service as well, or they travelled with a competitor.

Another major abuse of dominance investigation opened in 2017 is the one still pending against Frikom, a leading ice-cream manufacturer, for exclusionary abuse. This investigation takes place five years after the Serbian authority fined the company for the same type of abuse.

Merger control

The Commission imposed its first fine ever for gun-jumping. The culprit was a local IT company Prointer and the fine was in the amount of approx. EUR 56,000 (approximately 0.25% of its relevant turnover). The notifiable concentration in question resulted for a change from joint to sole control. The Commission discovered that the concentration was implemented inspecting information on change of ownership available at the website of the Serbian Business Registers Agency.

All but one concentrations were approved in Phase I. Phase II merger probe was launched in a concentration on the market for compressed and dry baking yeast, as a result of significant horizontal overlaps resulting from already high market share of the acquirer, which is in the range between 60-70% on both relevant markets, and the fact that the target is the only company in Serbia with capacities for production of baking yeast.

Legislative changes

The Commission has launched the initiative for preparation of a new Competition Act. The proclaimed aim of the new legislation is its further harmonization with the EU acquis, but also the introduction of tailor-made solutions taking account of the intricacies of the Serbian market. The new law is expected to implement stricter due process safeguards, especially in the context of dawn raids. No draft has yet been published.

As far as by-laws are concerned, the Commission published drafts of several new block exemption decrees pertaining to the Agreements between undertakings operating in rail, road and inland waterways, the agreements on the repair and maintenance of motor vehicles, the agreements on distribution of spare parts for motor vehicles, and technology transfer agreements.

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