Serbian Commission accepts legally binding commitments offered by Telekom Srbija

In a previous post, we wrote about the market test carried out by the Serbian Commission for Protection of Competition in relation to the commitments proposal by Telekom Srbije made in a probe involving the allegations of abuse of dominance.

On 14 November, the Commission adopted all of the commitments proposed by Telekom. Relying on the decisions of the European Court of Justice in Deutsche Telekom and Telefonica cases, the authority accepted, with respect to the margin squeeze concern, Telekom’s undertaking to set its wholesale and retail prices of ADSL internet services in accordance with the “equally efficient operator” test.

Concerning the allegations of price discrimination on the market of direct internet access, the Commission accepted Telekom’s commitment to set retail prices by applying the same ratio between the unit prices charged for direct internet access and those charged for leased flow on the wholesale level. Tying allegation was addressed by Telekom’s undertaking to abandon the practice of conditioning discounts for the wholesale of ADSL internet services with the purchase of direct internet access service.

Conclusion of definite-term contracts (up to three years) with users of direct internet access services, with the automatic renewal period shorter than three years, is a commitment undertaken to counter the allegation of unfair contracting terms.

The commitments are imposed for a period of two years. Telekom is ordered to report bi-annually to the Commission on the implementation of the commitments and on the current market conditions of relevance for the compliance with the commitments.

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This is the first commitments decision by the Serbian competition authority. This may encourage more undertakings under antitrust investigation to submit commitment proposals and thus avoid fines that may amount up to 10% of the infringer’s annual Serbian turnover.