Serbian competition authority opens a new gun jumping case

The Serbian Commission for Protection of Competition launched its fourth investigation in September 2020. The latest one will look into whether Zdravstvena ustanova Apoteka Janković, a privately owned chain of pharmacies (“ZUA Janković“), breached merger control rules by not notifying the acquisition of control over the pharmaceutical business of state-owned chain of pharmacies Zdravstvena ustanova Apoteka Zrenjanin (“ZUA Zrenjanin“).*

The gun jumping investigation in question relates to a concentration resulting from a concession agreement between ZUA Janković as the concessionaire and the City of Zrenjanin as the concession grantor and the sole owner of ZUA Zrenjanin. Under the agreement, ZUA Janković undertook to revitalize and manage 32 pharmacies constituting ZUA Zrenjanin, and take over all ZUA Zrenjanin’s employees, for a period of 15 years.

If the Commission determines that ZUA Janković infringed merger control rules, it can impose a fine on this company. The Competition Act caps a a fine for implementation of a notifiable transaction without obtaining a clearance to 10% of the total annual turnover generated in Serbia in the year preceding the commencement of investigation. However, the actual assessment of fines is further regulated by a governmental decree and the authority’s guidelines. According to these documents, closing a non-notified but notifiable transaction that would have been cleared had it been notified is classified as light infringement. Therefore, in the absence of aggravating circumstances such as repeated infringement or refusal of cooperation with the Commission, the amount of fine is likely to be below 1% of the Serbian turnover in the year preceding the commencement of investigation. In the only case so far in which it fined a company for gun-jumping, the Serbian authority issued a fine that corresponded to 0.25% of the acquirer’s relevant turnover.** If it (hypothetically) prohibits a concentration, the authority can order deconcetration.

* The other three probes relate to the alleged RPM restrictions on the wholesale and retail market for consumer electronics.

** Prointer/Alti case

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