Representatives of the Commission for Protection of Competition of the Republic of Serbia visited Rome during the three-day study visit to the Italian competition authority (Autorità Garante della Concorrenza e del Mercato). The study visit was organized as a part of a program support provided by „TAIEX“ – Technical assistance and information exchange instrument of the Directorate-General for EU enlargement.

During the study visit, a regulatory framework of the Republic of Italy competition law was presented, with particular emphasis on: determining infringement of competition in public procurement procedures; implementation of advocacy institute; implementation of leniency program and penalties for undertakings; practice in cases of conditional approval of concentration; implementation of economic analysis on competition regulation in specific sectors (free-lance professions, sport, burial services, banks, insurance).

The goal of this study visit was to improve knowledge and skills from the most important areas of competition law (restrictive agreements, abuse of a dominant position, economic analysis, control of concentrations), by informing from the examples of best practices and case studies of the Italian competition authority.

The second day of the international conference “Institution Building of the National Competition Authorities in South-East Europe”, organized by the Commission for Protection of Competition of the Republic of Serbia in cooperation with the European Bank for Reconstruction and Development and with the technical support of the Center for Liberal-Democratic Studies (CLDS), was dedicated to the role of economics in the implementation of competition policy. An important role in this, as well as many other matters related to the implementation of competition policy, is played by a high quality economic analysis.

During the conference, four panels were held which presented the experiences and economic tools in the process of market analysis, the determination of competition infringements and control of concentrations.

Notable presentations were given by Russell Pittman from the US Department of Justice, who presented the three most widely used economic instruments in the analysis of competition infringements, and Gregor Langus from the European Commission, who spoke about why economic analyses are the main tool in the effective policy of competition protection. Jelena Grahovac from the Economic Analyses Division of the Commission for Protection of Competition of the Republic of Serbia presented the experience of the Commission employees following the first economic and econometric trainings. The head of the Economic Analyses Division, Siniša Milošević, PhD, gave a speech on the “Analysis of price movement as a tool in defining the relevant market”, while Dajana Muženič-Abramovich from the Slovenian Competition Protection Agency spoke about the quantitative economic tests for defining the relevant market. Radu Paun from the Competition Council of Romania acquainted the participants of the conference with the economic instruments applied by this body in the context of measuring competitive pressure in the selected sectors of the economy. Gazmir Mani from the Albanian authority presented a case of abuse of dominant position in the mobile telephony market. Kim O’Sullivan from the EBRD provided a view of the role of economics in law and policy of competition protection as a way to improve the investment climate in the region.

In addition to the aforemntioned economic tools, competition authorities often use instruments for monitoring the market (such as sectoral analysis, studies, reports, research, etc.) with the aim of identifying possible weaknesses in the market and/ or the existence of conditions of competition infringements.

The Commission for Protection of Competition of the Republic of Serbia has, in cooperation with the European Bank for Reconstruction and Development and with the technical assitance of the Centre for liberal-democratic studies (CLDS), organized an international Conference on Institution Building of the National Competition Authorities in South- East Europe.

The Conference was opened by the President of the Commission for Protection of Competition, Miloje Obradović, PhD, the director of the EBRD for Serbia, Daniel Berg and the head of the Negotiating team for the Accession of the Republic of Serbia to the EU, Tanja Miščević.

The President of the Commission for Protection of Competition, Miloje Obradović, PhD, has emphasised that, after years of recession, the national competition authorities do not have the right to a mistake, that they must secure free application of the competition rules and intervene only to the extent and manner necessary to ensure consumer welfare.

”I believe that the only solution may be obtained through the build-up of institutional capacities of the bodies for protection of competition so that they would be enabled to, based on economic parametres, act as objectively as possible. What we need are new tools and instruments for assessing the market and behaviour of its participants. Also, what is important is the performance of relevant sector inquiries, the topic which we will, to my pleasure, discuss tomorrow.”

President Obradović has further stated that he believes there is significant room for improvement of the institutional capacities of the national competition authorities in the region.

”The exchange of experiences which contribute to the alignment of practice, as a necessity in the times of interconnected markets and globalization, as well as the presentation of new tools, procedures and legal solutions shall, without doubt, be the required step further in the fight against the increasingly subtle attempts at competition infringements, which we get to witness every day.”

The director of the EBRD for Serbia, Daniel Berg, has expressed his support for engagement and role of the national competition authorities and emphasised the importance of the fact that Serbia has a Commission which is capable of facing the challenges in creating equal conditions for all the market participants. These kinds of gatherings are, according to Berg, of crucial significance since they provide for an exchange of experiences which will improve the functioning of the all competition authorities in the South-East region of Europe.

”If the market is regulated, the conditions for economic growth and society welfare are in place. If the grey market has a larger share, the probability of criminality rise is higher”, it was concluded by Berg, who also added that the EBRD and other international institutions are making a strong contribution and efforts to enhance the regulatory framework in order to improve the investment climate in those countries.

In that sense, Serbia is extremely successful, in the opinion of Berg, since it has a set of economic laws in place which improve the conditions for its competitiveness.

The head of the Negotiating team for the Accession of the Republic of Serbia to the EU, Tanja Miščević has stated that Serbia will not face larger problems in negotiating Chapter 8 with regard to competition issues.

”When it comes to protection of competition, the position of Serbia shall, thanks to the quality of the work performed by the Commission for Protection of Competition, not be problematic. Nevertheless, state aid is also a part of this negotiating chapter and this is where matters will be a lot more complex.”

She made a remark that the Commission for Protection of Competition is a good example of the functioning of an independent body, even though such bodies were mainly unknown in the countries with transition economies.

The Conference was also attended by renowned panelists such as Russell Pittman, PhD, of the US Department of Justice, Lorenzo Ciari of the EBRD, Gregor Langus of the European Commission and many other international and local experts in this field, representatives of the legal profession, as well as the business and academic community in Serbia.

Media support of the Conference was provided by the N1 television, Fonet agency, as well as the Nedeljnik and Nova Ekonomija magazines.

The President of the Commission for Protection of Competition, Miloje Obradovic, Phd, with the members of the Councel of the Commission, has received Dimitri Loukas who is the Vice-President of the Commission for Protection of Competition of Greece.

In order to promote the further cooperation of these two institutions the topics of disscussion were the exchange of experiences in the field of the legislative framework and also the implementation of the policy of the Protection of Competition.

Obradović and Loukas agreed that there will be further steps in the collaboration which would allow the policy of the Protection of Competition to be even more efficient in this part of Europe. The activities that follow will provide for the Serbian Commision for the Protection of Competition to be even closer to European standards in the field of Law and the Policy of the Protection of Competition, which are an essential part of the negotiating process for accession to full membership in the European Union.

The honored guest of Commission for the Protection of competition was Russell Pittman, Phd, the director of the Department for Economic Analysis of the US Department of Justice. who is one of the leading experts on the issues of protection of competition.

Dr. Pittman held a useful lecture for employees of the Commission about using econometrics in market analysis, as well as experience in implementing competition policy in the United States.

Dr. Pittman will participate at the panel “The Role of Econometrics in the implementation of the Law on Protection of Competition” within the International Conference „Institution Building of the National Competition Authorities in South-East Europe” which will be held on June 2nd and 3rd 2016, in Belgrade in collaboration with the European Bank for Reconstruction and Development.

The lecture was attended by the members of the Council of the Commission, heads of division and employees of the Commision.

President of Commission for Protection of Competition issued, on the basis of Article 35, paragraph 2 of the Law on Protection of Competition, Resolution on initiation of procedure ex officio against 26 participants in the market of provision of geodetic services, for investigation of infringement of competition as stipulated in Article 10 of the Law on Protection of Competition.

The procedure was initiated following an initiative received by the Commission on April 12, 2016. The initiative stated that on several public procurement procedures for obtaining geodetic services, it was established that, as of the end of 2015, the bidders submitted bids with prices that significantly exceeded the estimated value of public procurement, which accordingly, led to suspension of respective procedures.

After a detailed analysis of all allegations and documents, Resolution on initiation of procedure was issued on April 19, 2016. Dawn raids were conducted at several locations in the premises of market participants.

We invite all persons who have data, documents or any other relevant information which may contribute to determining the factual situation in this procedure, to submit them to the address of Commission for Protection of Competition at Savska 25/IV, Belgrade.

Resolution on the initiation of procedure was published in the ”Official Gazette of the Republic of Serbia” no. 45/06.05.16.

To mark a decade of work of the Commission, guest of Commission for Protection of Competition was William E. Kovacic, Professor at the George Washington University and Director of the Competition and Market Agency of the United Kingdom (CMA). On this occassion, Prof. Kovacic gave an interview for the May issue of the monthly magazine The New Economy. Link to interview with Prof. Kovacic can be found here.

The employees in Technical Service of Commission for Protection of Competition attended a two-day workshop on the use of modern forensic tools during dawn raids. At the workshop, the employees went through a simulation scenario test, and analysis of results for the use of forensic software and equipment.

The aim of training is to improve further knowledge of authorized officials of Commission for Protection of Competition on techniques for data collection and triage, as well as evaluation of the nature and the amount of data examined by forensic tools, in order to achieve maximum efficiency of the procedure in dawn raid.

Dawn raid is an instrument that is provided by Law on Protection of Competition, by which a sudden inspection of premises or data, documents and items is made, about which party is informed only at the time of conducting investigation on the spot. Authorized officials carry out dawn raid if there is a reasonable doubt that there is a danger of removal or altering of evidence in the hands of a party or third party.

An official who conducts an investigation is obliged to show official identification and resolution on conducting the investigation at the business premises, i.e. to request undisturbed entry.Items of importance for decision making in the procedure, may be seized during dawn raid until identification of all relevant data and facts that are contained in these items, but no longer than until the end of procedure,

This is an efficient instrument for gathering evidence and detection of cartel agreements and other forms of infringements of competition.

Commission for Protection of Competition determined a measure of procedural penalty i.e. fine to the market participant, company “MB-Gas OIL”, Belgrade, in the amount of 12,000 euros for failure to act upon the Request of the Commission ordering provision of information dated February 26 of this year. Such Request obliged the mentioned company to submit data necessary for sector inquiry of the state of competition in the market of whole and retail sale of oil derivatives in the Republic of Serbia.

Given that the deadline for submission of the required data expired on March 7, 2016, and that this company did not contact the Commission with a request to extend the deadline for submission of data, or otherwise reported to Commission the reasons for its failure to act upon the Request of the Commission, the Council of the Commission issued a decision on determination of measure of procedural penalty. The amount of money of procedural penalty i.e. fine, is fixed at 500 euros for each day of non-compliance with the Request of the Commission.

Procedural penalty in the amount of 500 to 5,000 euros for each day of conduct contrary to the order of the Commission, or non-compliance with its order, is defined by the provisions of Article 70 of the Law on Protection of Competition. Company ”MB-Gas OIL” must pay stated amount within two months from the date of the decision, under the threat of forced execution. The amount of money of the measure of procedural penalty i.e. fine shall be paid to the account of budget of the Republic of Serbia.

In determining the amount of procedural penalty, i.e. fine, the Commission shall apply the criteria prescribed by the Law on Protection of Competition, Regulation on criteria for determining te amount to be paid on the basis of measure for protection of competition and procedural penalty, manner and deadlines for payment and conditions for determining these measures, as well as Guidelines for the implementation of that Regulation, that was passed by the Council of the Commission on May 19, 2011. The Law on Protection of Competition specifies that procedural penalty i.e. fine cannot be more than ten percent of the total amount of turnover calculated in the manner provided by the Law.

On the occassion of the Competition Day and marking of ten years of successful work, Commission for Protection of Competition has organized an international conference dedicated to competition policy.

The conference was opened by the Vice President of the Government, Prof. Kori Udovicki, Ph.D., President of Commission for Protection of Competition Miloje Obradovic, Ph.D., Aleksandra Tomic, Ph.D., President of the Committee of Economy, Regional Development, Trade, Tourism and Energy of the National Assembly and Stefan Hudolin from the Delegation of the European Union.

President of Commission for Protection of Competition, Miloje Obradovic announced, on that occassion, passing of the new law, which would enable more efficient work of the Commission. ”We will open a broad debate in order to find best solutions and ideas, which would result in proposal of a new, high-quality Law on Protection of Competition”, he said. President Obradovic said that the current Law is based on EU acquis, but its changes are necessary, because, after all, it has certain weaknesses that may create possible legal uncertainty. He also noted that there is a significant room for improving the institutional capacity of the Commission and added that the sustainable functional independence of the Commission is important.

”Already we are proud that a qualitative shift was made regarding the importance of initiated procedures and their professional conduct before the Commission. We consider as significant the number of confirmed decisions, because these decisions issued by the Commission are directly aimed at the establishment of effective competition. Big steps were also made towards harmonisation with EU standards, which was a joint conclusion after a very successful bilateral screening of Chapter 8 in Brussels. The Commission also started with the implementation of important legal instrument – dawn raid to combat distortion of competition rules,” he pointed out.

Vice President of the Serbian Government Kori Udovicki expressed support for the work and functions of the Commission. ”We are willing to give support to the improvement of regulatory frame for building a stronger competition,” she said. According to the words of Vice Presicent Udovicki, it is important that this institution exists, regardless of the ultimate outcome of the road to the EU and also, that the activities and influence of the Commission should extend.

Vice President Udovicki also said that the biggest challenge for Serbia is to create business environment, which will be more receptive and productive.

President of the Parliamentary Committee for Economy, Aleksandra Tomic said that Serbian National Assembly, and in particular Committee for Economy, Regional Development, Trade, Tourism and Energy has a completely proactive stance that relates specifically to the process of preparation and adoption of amendments to the Law on Protection of Competition, participation in the presentation of the Report on the work of the Commission and, the last but not the least important, forwarding of materials of relevance for competition to Commission, of which the Committee expected and received substantiated and timely responses.

Representative of Delegation of the European Union in Serbia Stefen Hudolin said that Serbia, supported by EU has come a long way in competition protection and added that the Serbian regulations governing this field are largely harmonized with European legislation.

In the professional part of the conference attended by around 120 guests, the participants were Theodor Tanner, President of Austrian competition authority, William Kovacic, professor at the George Washington University, Hassan Qaqaya, former Director of Competition Policy and Consumer Protection of the UN Conference on Trade and Development, Bogdan Marius Chiritoiu, President of Romanian Council for Competition, Jana Mikhailova, President of the Board of Foreign Investors Council, Mladen Cerovac, President of Croatian Competition Agency and Andrei Kasavarov, Deputy President of Federal Antimonopoly Service of the Russian Federation, officials of regulatory authorities, academic institutions, as well as representatives of chambers of commerce, law firms and business associations.