Renowned publisher Springer has published eProceedings from the international conference “Institution Building of the National Competition Authorities in South-East Europe” held in Belgrade in June 2016, organized by the Commission for Protection of Competition in cooperation with the European Bank for Reconstruction and Development (EBRD).

This highly successful conference was opened by President of the Commission for Protection of Competition, Dr. Miloje Obradović, EBRD Director for Serbia, Daniel Berg, and Head of the Negotiating Team for Accession of the Republic of Serbia to the EU, Tanja Miščević, while SEE region participants were able to exchange valuable experiences and views during the conference.

The proceedings contain contributions and papers prepared by employees of the Commission for Protection of Competition, as well as international and national competition policy experts.

The proceedings are published as a part of the Springer’s Contributions to Economics book series, which provides an outlet for innovative research in all areas of economics, published in print and ebook volumes and disseminated and promoted globally.

eProceedings can be downloaded from the following link:

https://link.springer.com/book/10.1007/978-3-319-76644-7

The preparatory meeting, held in the premises of the Commission for Protection of Competition, marked the initiation of the two-year project entitled “Capacity Building for the Serbian Commission for Protection of Competition”, supported by the European Bank for Reconstruction and Development.

The main objective of the project is to improve the operational capacity of the Commission, primarily focused on drafting guidelines, updating the competition glossary for standardization of competition law terminology, organizing training programs on issues relating to the interface of numerous sectoral regulations and competition policy framework, organizing study visits to other highly developed European competition authorities, and purchasing new econometrics software and providing associated training for the Commission’s economists.

Preparation of draft guidelines for self-assessment of restrictive agreements, as well as for assessment of horizontal concentrations will further enrich the competition policy framework by providing a clear guidance to undertakings about the CPC’s approach in these two key areas. One of the important project outputs will be the preparation of a glossary, which will contribute to the common understanding of specific technical competition terminology that is currently either not translated in Serbian or not used in a standardized way. Also, each training program delivered within the project will focus on the discussion of specific cases that deal with the interface of competition law and sector regulation. The cases discussed will be important cases from selected EU countries.

This meeting also served as a platform to arrange an indicative project schedule and related dynamics, as well as all aspects of project implementation.

On behalf of an international consortium managing the project, as a successful tenderer selected by EBRD, the meeting was attended by Professor Yannis Katsoulacos, project manager, and Professor Boris Begović, national project manager. The Commission was represented by all division heads, in addition to the CPC Administrative and Professional Service representatives who will be in charge of specific activities.

The consulting team selected by EBRD for the implementation of this project comprises of renowned national and foreign experts such as Professor Joseph Harrington – USA, Professor Christos Genakos, Assistant Professor Vasiliki Bageri – Greece, Professor Russell Pittman – USA, as well as Assistant Professor Bojan Ristić, Professor Radmila Dragutinović-Mitrović and Professor Dušan Popović – Serbia.

President of the Commission for Protection of Competition, Dr. Miloje Obradović, met today with Head of the European Union Delegation to Serbia, Sem Fabrizi.

The main discussion topics related to activities implemented by the Commission for Protection of Competition in improving the business environment in the Republic of Serbia, particularly those concerning accession negotiations within Chapter 8: Competition policy.
Dr. Obradović introduced Ambassador Fabrizi to the Commission’s activities to date and plans, particularly those concerning the drafting process of the new competition act and the alignment of current antitrust regulatory framework with the EU acquis.

During the talks, Ambassador Fabrizi recognized the Commission’s operational efforts and assessed that a significant improvement has been made during the last couple of years, especially in the competition advocacy area and raising awareness on the importance of competition policy in Serbia.

“Fair competition is an essential component of transparent business environment in Serbia. EU highly values the work done by the Commission in recent years – this progress is also recognized in the European Commission’s Report on Serbia 2018. I encourage the Commission to continue on this path and call all relevant stakeholders to ensure the Commission’s operational independence within the framework of its competence”, said Fazbrizi.

Within the “Capacity Building for the Commission for Protection of Competition” project, implemented by the Commission for Protection of Competition in cooperation with the European Bank for Reconstruction and Development, six employees of the Commission’s Administrative and Professional Service have attended the Competition and Regulation European Summer School – CRESSE, held in Crete. The Commission’s representatives also attended the CRESSE Annual conference.

CRESSE is an international network of scholars and practitioners with a research or professional interest in competition policy and network industry regulation, established in 2005 and managed by the Athens University of Economics and Business.

Objective of the Summer School for Economist and the Lawyers’ Course was to familiarize participants with the new economic literature, recent competition policy developments and methods used to assess business practices in the context of competition law. The school provides a comprehensive account of the most up to date developments in economic theory, empirical analysis, legislation and policy in the areas of competition and regulation. Following the implementation of this professional development course is expected that CPC staff will further improve their academic writing skills, and in addition to their practical involvement in antitrust cases also contribute to CPC advocacy related efforts, in addition to improving the knowledge of undertakings by publishing papers on competition policy issues.

The Summer School was attended by economists and lawyers from the Division for Assessment of Competition Infringements, Division for Investigation of Concentrations and the Economic Analyses Division of the Commission for Protection of Competition.

Regarding the false information published on July 2, 2018 on the Srbija Danas portal, the Commission for Protection of Competition has forwarded the retraction statement to this media outlet. Since the Commission’s reply was not immediately published, i.e. without any delay upon its receipt, pursuant to the provisions of Article 83 of the Law on Public Information and Media, the Commission hereby informs the general public on the information concerning this case.

REPLY

In the Srbija danas media content, distributed via internet page www.srbijadanas.com, a series of false and incomplete information concerning the work of the Commission for Protection of Competition have been published in the article by an unknown author.

In the proceedings against EPS Distribucija, the Commission has enacted a decision in December 2016 on the abuse of dominance effected by said company, by applying dissimilar and unfair business conditions to equivalent transactions with respect to a variety of undertakings, by which individual undertakings are placed in unfavorable position against competitors, and which was originally confirmed by the Administrative Court. By using its right to extraordinary legal remedy, EPS Distribucija has filed a review petition before the Supreme Court of Cassation against the Administrative Court’s ruling, after which the Supreme Court of Cassation has set aside the judgment and referred the case back to the Administrative Court for judgement. In the enforcement of this judgment, the Administrative Court has annulled the Commission’s decision and REFERRED THE CASE BACK FOR ASSESSMENT.

In the published article is correctly mentioned that in the decision concerned the Commission has imposed a measure for protection of competition in the amount of 330 million dinars, but statements from the published article that the Administrative Court has ordered the Commission to fully repay 330 million dinars to EPS Distribucija, with 35 million dinars in interest charges, are incorrect since such order is nonexistent. Furthermore, the Commission would not be able to repay the mentioned amount since such fee is not paid to the Commission’s account but the Budget account of the Republic of Serbia. Also, the Commission only became aware of the alleged interest charges and the related amount after reading this article, and holds no information on the party, institution and instruments used for the calculation of the interest charges or whether the interest will be charged at all. The judgment cannot quote this amount, since the request for reimbursement of funds submitted by EPS Distribucija to the Ministry of Finance – Tax Administration is filed on June 21, 2018, and the Administrative Court’s judgment is enacted on February 23, 2018.

With reference to the statement that the Commission has recognized Kosovo as an independent state, which was even quoted in the headlines, the Commission hereby underlines its refusal to be included in the attempt to politicize this case. As in all previous decisions, the Commission has defined the relevant geographic market in full and complete accordance with the facts and the Law, thus the definition provided in such manner is without prejudice to positions on status of the AP Kosovo and Metohija or territorial structure of the Republic of Serbia. The definition depends on a series of circumstances, mostly economic, and is often the case that the defined relevant market is wider or narrower than the territory of the Republic of Serbia (such as, for example, territory of the City of Belgrade, Western Serbia, airport pair Belgrade-Rome, etc.). Following the author’s logic, when the Commission defines the relevant geographic market as more narrow than the national, does that mean that it recognizes the independence of that part of the territory as well? It is undisputed fact that EPS Distribucija only conducts its operations in a territory defined by the Commission as the relevant geographic market, whereby such position is also confirmed by the Energy Agency of the Republic of Serbia, both on its webpages and in a letter dated April 17, 2018. In this letter, EARS states, inter alia, that “Distribution system operator EPS Distribucija is the only energy subject performing the electric power distribution services via distribution system management operations in the territory of the

Republic of Serbia, excluding the APKM.” The Commission has presented all these points in detail in the decision’s segment on the definition of the relevant geographic market (pages 12-19). We here underline that in the decision’s rationale is also stated that the Commission has established the publishing of the Activity report for 2016 on the EPS Distribucija webpages, where on page 30 under item 6 is stated that company EPS Distribucija performs its activities in the consumption area of the Republic of Serbia, while the Activity reports of EARS for 2015 and 2016 provide a more precise definition where is stated that “Electric power distribution operations in the territory of the Republic of Serbia, excluding APKM, in the first half of 2015 are performed within five electric power distribution companies.”

Also, in the article is imputed that the Commission “fails to observe laws and disrespects the courts of the Republic of Serbia” which is absolutely unacceptable, by presenting a false claim that the Commission was ordered by the Administrative Court’s judgment to perform a court witnessing and conduct an oral hearing, while failing to do so according to the statements presented in the article. To illustrate, we hereby provide a quote from the judgment: “In the repeated proceedings…the claimant’s proposal (EPS Distribucija, A/N) for an appropriate court witnessing shall be also assessed…”. In the repeated proceedings, the Commission has assessed the presented proposal, and thus has acted in line with the order from the court’s judgment. Therefore, the judgment does not order the court witnessing, while the oral hearing is not even mentioned.
Perhaps the author’s overlooking particular wording from the judgement and such omission of facts in the article published on the Srbija Danas website seems trivial to the average reader, but those words are proving crucial for evidencing the Commission’s acting in accordance with the Administrative Court’s orders.

One more way of compromising the competition policy and work of the Commission relates to the statement presented in the article that “the Commission finds citizens unimportant, since the Commission has failed to consider the effect of EPS Districucija’s market behavior on end-users, that is, Serbian citizens.” In the light of wellbeing of consumers, the Commission has eliminated the infringement of competition by its acting, thus has prevented indirect negative spillover effects on end-users. The Commission has explained in detail the effects of competition infringements effected by EPS Distribucija, by presenting a chain of effects from direct buyers dealing with EPS Distribucija to end-users.

The Commission hereby underlines that the purpose of the proceedings concerned was to secure equal business conditions for all buyers dealing with EPS Distribucija, regardless of their ownership structure. The infographic entitled “Free electric power market” as part of the article, supports the justification of the Commission’s acting, because it demonstrates the electric power prices and market share of EPS Snabdevanje which are invalidated following the institution of proceedings before the Commission, as well as following the enactment of a decision from December 2016.

The goal of competition policy is to secure a level playing field for the largest possible number of players, leading to price reductions or quality improvements, which was a principle honored when enacting this decision of the Commission as well. The Commission achieves these goals in its operational activities vis-à-vis undertakings regardless of their ownership structure and size, as an obligation under the Law on Protection of Competition.
Owing to this approach in commenting its work and decisions, the Commission was forced to deviate from its usual no-comments practice and engaging in controversy with the general public before the validity of its enacted decisions.

Finally, regarding the author’s allegations that the Commission “has not found it necessary to provide an answer to the questions raised to the citizens”, we hereby underline that on June 22 (by issuing two statements), as well as on June 25 and 26, 2018, we have attempted to provide answers to all questions presented, and have provided to journalists of the Srbija Danas portal a link to the decision in question, where the Commission’s decision is rationalized in detail in the 50-page document.

Signed: Commission for Protection of Competition of the Republic of Serbia