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Commission President Took Part in the Expert Symposium on Public Procurement

SUBOTICAPresident of the Commission for Protection of Competition, Miloje Obradović, PhD, delivered a keynote address during the opening part of the expert symposium “Significance of public procurement in creating business environment”.

Addressing the competences of the Commission in this segment of business activities, President Obradović reminded that pursuant to the Law on Protection of Competition, rigged bids in public procurement are considered as the most severe competition infringements.

Dr Obradović emphasized, among other things, that detected rigged public bids are sanctioned in accordance with the Law in monetary terms in the amount up to 10% of total preceding year revenues, in addition to the prohibition against participating in public procurement procedures during certain period of time. Dr Obradović ascertained that sometimes „appears that this is not a sufficient threat to those who believe that their personal financial interests are above the prosperity of society they are part of“.

During last year, the Commission published the Opinion on the implementation of Article 10 of the Law on Protection of Competition, thus defining the position of the Commission in the case of affiliated undertakings in public procurement procedures. The intent of the Commission during drafting of this document, as dr Obradović also specified, was to secure achievement of a higher degree of legal security of all undertakings in public procurement procedures, increased transparency of the Commission’s operations and more efficient implementation of the Law on Protection of Competition, as well as of the Public Procurement Law.

In the second part of the symposium, the Commission representative, Vladimir Antonijević, presented the role of the Commission for Protection of Competition in public procurement procedures.

The symposium was organized by the Chamber of Commerce and Industry of Serbia in cooperation with the Commission for Protection of Competition, Public Procurement Office and Republic Commission for Protection of Rights in Public Procurement Procedures.

City of Subotica Assembly Failed to Fully Act on the Commission Opinion

SUBOTICAThe Commission for Protection of Competition expresses its concern due to the City of Subotica Assembly failure to fully act on the Commission opinion relating disputed provisions of the decision arranging utility service of burial and cemetery management in Subotica.

The Commission’s position, presented in the opinion, is that competition infringement and awarding monopoly rights to the municipal public utility company to the detriment of the service users must not occur. The Commission does not believe that granting monopoly rights based on the interpretation of legal terms “burial” and “other acts” is admissible, as considered by the City of Subotica Assembly.

The Commission has sent opinions to the City of Novi Sad Assembly and City of Pančevo Assembly regarding similar issue, whereas the Commission’s position has been acknowledged and fully implemented.

The Commission points that they continue to believe that the City of Subotica Assembly interpretation is too wide, which as its consequence has a restriction of competition and creation of monopoly in conducting burial and cemetery management utility service, when such behavior is neither necessary nor preferable. In that sense, it is expected that disputed provisions of the decision arranging utility service of burial and cemetery management by the City of Subotica Assembly shall be immediately amended pursuant to the opinion provided by the Commission.

On that account, the Commission also sent an opinion to the line ministry pointing to the need to precisely define terms arranging the area of burial and cemetery management in the future regulations so that monopolization of those activities based on different interpretations of legal provisions would be avoided.

The Commission takes this opportunity to emphasize the significance of treatment of the City of Subotica Assembly, considering that by adopting amendments to the disputed decision it would achieve a positive influence on competition. Amendments to the disputed provisions would enable conducting certain funeral services by all interested parties, that is, not just the public utility company but also other companies, entrepreneurs and other business entities, to the benefit of all service users.

President of the Commission Spoke at the Subcommittee on Internal Market and Competition Meeting held in Brussels

SBB IKOMPresident of the Commission, Miloje Obradović, PhD, spoke at the ordinary meeting of the Subcommittee on Internal Market and Competition held in Brussels.

Dr Obradović introduced the European Commission representatives on all activities related to the implementation of the Law on Protection of Competition, as well as on the degree of harmonization of competition related regulations with the EU acquis, which is in accordance with the commitments from Article 73 of the Stabilization and Association Agreement.

In presenting the Commission’s operative results, President Obradović emphasized that the commitment related to harmonization of the Law on Protection of Competition against the new Law on General Administrative Procedure shall represent a great challenge, but that for competition policy implementation is of a great significance that proceedings conducted before the Commission be recognized and defined as a separate administrative procedure, adjusted to the needs of the Law on Protection of Competition.

In its addressing, the Commission President pointed that the institution he heads, and in line with the possibilities and competences, shall endeavor to contribute in creating projects that would bring the subject of competition legislation closer to the judges, aimed at enabling advanced training for working on the cases from this area, which would also have an impact on achieving more efficient implementation of the Law on Protection of Competition.

In its addressing, President Obradović particularly mentioned: “The focus of sector inquiries shall be directed towards markets that in previous period already provoked the interest of the Commission as the case proceedings, or that based on the information are pointing to the fact that the current competition conditions may cause a concern of the Commission. Plausible sectors we shall investigate in the period to come, might encompass the gas, retail and pharmaceutical products markets.”

It has also been highlighted that the Commission’s intent, within its activities, is to promote the Leniency program even more intensely, and to introduce undertakings to the related advantages.

“The Commission shall also continue to work more intensely on raising awareness of the necessity to protect competition in Serbia, as well as on the implementation of practice related to including all interested parties in the regulations drafting procedure, aimed at securing transparency in the Commission’s operations”, said Dr Miloje Obradović, Commission President, in closing to its speech.

During the Subcommittee meeting that is regularly held as part of Serbia’s EU accession process, is presented that our country follows the dynamics of competition development in the EU and strives as much as possible to harmonize its standards against the EU standards. This is also confirmed by the EC review given in recently published the Progress Report for 2016, in which is emphasized that Serbia’s legal framework is mostly aligned with the EU acquis.

Commission Intends to Conduct the Retail Market Inquiry

SBB IKOMThe Commission for Protection of Competition intends to conduct the retail market competition inquiry related to non-specialized stores predominately supplied with food, beverages and tobacco. The inquiry would encompass the retail end-user and procurement markets, focusing on the relationship between retailers and their suppliers.

The sector inquiry related to this market is important having in mind that retail sales represent the sector where, perhaps predominately, the significance on the consumers is conspicuous, therefore making it considerably important to perform an overview of tendencies in this industry, as well as in related sectors within the supply chain.

In addition to the aforementioned, the considerable enlargements on the retail market and distribution of foodstuff have occurred during the last decade in Serbia, which reflected on the commercial relations between retailers and their suppliers, as well as on the considerable market concentration.

Having in mind these facts, the Commission concluded that the situation on retail market in the Republic of Serbia points to the need to conduct the inquiry on competition conditions and alterations in the market structure, as well as the inquiry on this specific undertakings’ behavior that might represent a competition infringement.

The results of this inquiry would also enable the Commission to conduct ex-post inquiries on more significant concentrations implemented in the previous period.

The inquiry should also contribute to the improved perception of contractual relations between suppliers and market chains, along with the effects those relations may have on the condition of competition on the market, foremost keeping in mind the relative small number of initiatives for instituting competition infringement procedures submitted in the previous period.

The Commission Achieved a Significant Improvement – Evaluation of the Foreign Investors Council

FICOn November 28, 2016, the Foreign Investors Council in Serbia presented this year’s edition of the “White Book”, a traditional overview of the business climate in Serbia, as well as recommendations for its improvement.

This document states a significant improvement achieved in operations of the Commission for Protection of Competition of the Republic of Serbia.

As per evaluation of the Foreign Investors Council, “the progress in the field of protection of competition was propelled by continuous regulatory improvements, strengthening of administrative capacity, and strong advocacy activity by the Commission for Protection of Competition. The key positive developments include the following activities performed by the Commission: successful implementation of the binding procedure; enacting the new Regulation on notification of concentration – merger control (in accordance with the EU legislation); readiness to organize pre-notification meetings in order to eliminate any ambiguities; more frequent conduct of down raids; stronger advocacy activities related to the development of competition policy by providing more information on its work, publishing opinions and decisions on the website and other promotional activities.”

The recommendation provided to the Commission is to provide a monthly overview of its activities and not only within its Annual Reports, because it would definitely contribute to increasing transparency in the work of the Commission.

The “White Book” is an overview of the business climate in Serbia provided from the angle of foreign investors, and at the same time and in transparent manner serve as a platform for communication with the authorities, and in this sense also contain certain recommendations for improvement of the state authorities operations.

Commission Representatives at the Association of Competition Economists’ Conference in Amsterdam

SBB IKOMRepresentatives of the Department for Economic Inquiries of the Commission for Protection of Competition, Siniša Milošević, PhD, Department Head, and Jelena Markopoulos, MA, Senior Advisor, attended the 14th annual conference of the Association of Competition Economics – ACE, held in Amsterdam.

The two-day conference is organized into three plenary sessions and multiple parallel sessions, during which the numerous current cases from the European competition authorities’ practice were discussed, from concentrations (Celesio/Sainsbury, Ahold/Delhaize, British Telecom/EE, etc.), abuse of a dominant position (Deutsche Post), and harmonized practice (Container Shipping), to the energy market inquiries conducted in Great Britain.

During the stay in the Netherlands, the Commission representatives also attended the conference organized by the Netherlands Authority for Consumers and Markets – ACM, honoring the tenth year operating anniversary of the Department for Economic Inquiries.

Numerous representatives of the European competition authorities, reputable consulting firms and academics attended the conference, exchanging their experiences regarding the review of competition and consumer protection authorities’ operating efficiency.

Proceeding upon the Notification of Concentration Submitted by the “Serbia Broadband – Srpske kablovske mreže” Ltd Company is Continued

SBB IKOMOn November 14, 2016, the President of the Commission for Protection of Competition enacted the Conclusion on continuation of proceeding ex officio, instituted upon the Notification of concentration submitted by the „Serbia Broadband – Srpske kablovske mreže” Ltd company, created by acquiring the control over the „Interaktivne kablovske objedinjene mreže – I.KOM” Ltd company. The proceeding is continued ex officio for investigation of the notified concentration’s fulfillment of conditions of permissibility from Article 19 of the Law, i.e. determining whether the implementation of such concentration would significantly restrict, distort or prevent competition in the market of the Republic of Serbia or its part, and in particular if such restriction, distortion, or prevention would be the result of creating or strengthening of a dominant position.

During the investigation proceeding, the Commission shall conduct all necessary actions and determine all facts and present evidence necessary for defining the relevant market(s), structure of the relevant market(s), degree of concentration of the relevant market(s), identification of actual and potential competing parties, concentration participants’ market position, suppliers and users’ possibility to choose, legal and other obstacles for entering the relevant markets, competitiveness level of the concentration parties, users’ interests, etc.

In accordance with the Law, the Commission is obligated to complete the proceedings within the period of four months from the date of instituting proceeding ex officio.
All persons in possession of data, documentation or other relevant information that could contribute to the accurate fact-finding in this proceeding are called upon to immediately submit the said to the Commission for Protection of Competition, 25/IV, Savska Street, Belgrade.

Aftermarkets Sector Inquiries

AFTERMARKETSBased on the Decision of the Council of the Commission for Protection of Competition, an inquiry on competition related conditions on aftermarkets has been conducted. The inquiry encompassed aftersales services, guarantees, turnover and use of spare parts for motor vehicles and top selling home appliances – refrigerators and washing machines.

Apart from comprehensive conditions inquiry, specific conclusions are established in addition to the list of recommendations aimed at improving legitimate and fair market operations of all undertakings, as well as facilitating consumers and their organizations in perceiving products running costs.
The added intent of this inquiry, and in particular of its conclusions and recommendations, is to point the competent state institutions to the conditions on inquired markets, whilst to facilitate the proactive operating of the Commission aimed at deterring undertakings from competition infringement related acting.

The results of conducted researches and associated established conclusions, enabled adopting a number of positions that might serve the Commission for Protection of Competition and other competent authorities of the Republic of Serbia, as well as consumer associations, in planning, adopting and implementing measures and actions from their field of competence.

One of provided recommendations is to initiate a research on motor vehicle related prices and average running and servicing costs, as well as to publish and promote them in order to facilitate motor vehicle buyers’ consideration of total costs taken when purchasing motor vehicles and received product related value-to-price. The estimate of the research team is that such inquiry would contribute to the more realistic buyers’ comprehension of the scope of costs they endure when buying and servicing and repairing motor vehicles, which would contribute the intensifying competition on both basic products market and aftermarkets.

The results of aforesaid inquiry will be used in the course of preparing the Draft Regulation on conditions for group exemption of agreements in the motor vehicle sector, transporting the EU Commission Regulation no. 461/2010 into our legislative system.
The project is conducted in cooperation with the Public Policy Secretariat of the Republic of Serbia with financial and technical support from the PERFORM Project of the Swiss Agency for Development and Cooperation. As per Project’s ToR prepared by the Commission as contracting authority of the inquiry, the research was conducted by the Institute of Economic Sciences, as the Project research partner.

All undertakings and other expert community are hereby invited to submit their comments as per the Report, no later than December 31, 2016, to email address: office.kzk@kzk.gov.rs, referencing: Comment on the aftermarkets sector inquiry.

Commission Representatives Attended the “Focus on Competition” Conference

usaPresident of the Commission for Protection of Competition, Miloje Obradović, PhD, held an opening speech at the jubilee, tenth in a row, “Focus on Competition” conference traditionally organized by the Karanović & Nikolić Law Office and Friedrich Naumann Foundation for Freedom from Germany.

Dr Obradović pointed out, among other things, that full implementation of the current Law on Protection of Competition in previous period has confirmed that there is a room for normative improvements. This is of a particular significance keeping in mind the enactment of the new Law on Administrative Procedure whose full implementation is foreseen for the middle of next year, and which will hold the position of a system, i.e. fundamental law.

The Commission President emphasized that the favored solution while awaiting the implementation of the new Law on Administrative Procedure is to enhance judges’ education, the goal of which being the improvement of judicial competition infringement processing capacities. He also reminded of the fact stated in the European Commission Report on Serbia’s progress related to the underlined importance and necessity to strengthen judicial capacities to handle complex competition infringement cases.
This year’s “Focus on Competition” conference presentations and discussions were focused on the competition legislative area, Austrian competition watchdog’s practice and related competition legislative area, in addition to the EU legislation related influence on candidate countries in the area of competition legislation.

One of the panelists also was Siniša Milošević, PhD, Head of Department for Economic Inquiries in the Commission for Protection of Competition, who addressed the attendees by presenting economic inquiry practices executed in the Commission’s operations and their related importance on more efficient work of the institution.

Slovenian Competition Protection Agency Director Visited the Commission

kzk-ekofFollowing the invitation of the Commission President, Miloje Obradović, PhD, Mr. Andrej Matvoz, acting Director of the Slovenian Competition Protection Agency, visited the Commission for Protection of Competition.

This was an opportunity for exchange of experiences in the field of competition policy and legal framework implementation, as well as for improvement of future cooperation, the good foundation being already existing Agreement on Cooperation between those two institutions.

President Obradović introduced the guest from Slovenia on Commission’s activities in the field of competition policy implementation, further to those performed within the EU accession process efforts made by Serbia.
In the course of conversation, further cooperation phases have been agreed, enabling the competition policy implementation in this part of Europe to be more efficient, aside of bringing the Serbian national competition authority closer to the European standards in the field of competition regulation and policy, which represent an important segment of the negotiating process for accession to full membership in the European Union.