The Commission for Protection of Competition uploaded on its YouTube channel a video clip, produced to inform undertakings on the possible use of the Leniency Programme.

The Law on Protection of Competition provides for the Leniency Program for undertakings that report restrictive agreements, which envisages the full or partial immunity from fines in return for the cooperation with the Commission necessary for their disclosure and gathering evidence, in particular, in respect of the cartels.
Under the project “Increasing economic growth through support to promotion of competition policy” implemented in cooperation with the Kingdom of Norway and the Royal Norwegian Embassy in Belgrade, the Commission produced this video material in an effort to incite and inform undertakings in the Republic of Serbia that have participated in restrictive agreements, of the benefits of the Leniency Programme.

The Commission for Protection of Competition instituted antitrust proceedings ex officio against companies Porsche SCG Beograd, subjected to a dawn raid, Autokomerc Beograd, Autocentar Manik – ACM Preljina, and Bros Auto Niš, to investigate the existence of restrictive agreements referred to in Article 10 of the Law on Protection of Competition, which restrict competition on the car sales market in the Republic of Serbia.

When analyzing competitive conditions on the markets for automotive sales and aftersales services in 2017, 2018 and 2019, the Commission has established the existence of a contractual provision in the provided agreements for products/Audi-branded vehicles, enabling the importer to set resale prices of motor vehicles. Such provisions can disturb and even eliminate price competition in retail, that is, price competition that could have existed between car dealers of this particular brand if they had been able to set their resale prices independently.

For the reasons outlined above, the Commission will, in particular, investigate whether the companies against which the proceedings had been brought, have set the resale prices of products/Audi-branded vehicles, which would represent an infringement of competition referred to in Article 10 of the Law.

The Commission for Protection of Competition invites all persons in possession of data, documents, or other relevant information that could contribute to the accurate fact-finding in this proceedings, to present said evidence to the Commission at 25 Savska St., 4th Floor, Belgrade.

In accordance with Article 47 of the Law on Protection of Competition, the Commission for Protection of Competition has conducted a sector inquiry into competitive conditions on the wholesale market for synthetic (mineral) fertilizers.

The Commission has noted the need to analyze the competitive conditions on the fertilizers market given the increase in the producer price of fertilizers in the first three quarters of 2019, as well as the bankruptcy of one of the largest manufacturers of synthetic fertilizers in the Republic of Serbia – company “HIP Azotara” from Pančevo.

The research is carried out to provide a comprehensive overview of the structure and dynamics of this market and competitive conditions prevailing therein, as well as to identify potential market weaknesses.

In this inquiry, the Commission started off from the wholesale market for synthetic (mineral) fertilizers as a whole, within which it has analyzed the market for nitrogen fertilizers and the market for compound fertilizers.

For the purposes of this analysis, the Commission has collected and processed the data of the Statistical Office of the Republic of Serbia and the Ministry of Finance – Customs Administration, as well as other publicly available data and information relating to the production, import, export, and wholesale of synthetic fertilizers. The sector inquiry also looked into eight undertakings, manufacturers, and importers whose combined share accounted for about 90% of the total estimated fertilizers market in 2019.

The Commission wishes to express its gratitude to all undertakings for providing the requested information throughout the drafting process, and invites all interested parties and other experts to present their respective commentaries to the report by sending their observations to the email address office.kzk@kzk.gov.rs, Subject line: Commentary to the sector inquiry into fertilizers market, no later than January 15, 2021.

The Commission for Protection of Competition instituted ex officio proceedings against company Zdravstvena ustanova Apoteka Janković to investigate a merger implemented before obtaining clearance under the Law on Protection of Competition, which, based on reasonable grounds to believe, is created by the acquisition of control on the part of Zdravstvena ustanova Apoteka Janković over pharmaceutical operations of Zdravstvena ustanova Apoteka Zrenjanin.

In the investigation procedure, the Commission will assess the criteria provided by the Law (Article 19 of the LPC) on the permissibility of mergers, and in particular, the fact that the case concerns a non-notified merger implemented without authorization and noncompliance by said undertakings with their obligations under the national merger control regime.

The Commission will establish all the relevant facts, evidence, and other elements on which to base its decision on potential actions, that is, deconcentration measures.
The Law provides that concentrations of undertakings are permitted, unless they significantly restrict, distort, or prevent competition on the market of the Republic of Serbia or its part, and especially if that restriction, distortion, or prevention is the result of creating or strengthening of a dominant position.

The conclusion instituting proceedings invites all persons in possession of data, documents, or other relevant information that could contribute to the accurate fact-finding in this proceedings to forthwith present said evidence to the Commission for Protection of Competition at 25 Savska St., 4th Floor, Belgrade.

The Commission for Protection of Competition instituted antitrust proceedings ex officio and carried out a dawn raid at business premises of company SF1 Coffee d.o.o., a Nespresso importer and distributor, to investigate the existence of restrictive agreements referred to in Article 10 of the Law on Protection of Competition, which restrict competition on the retail and wholesale market for consumer electronics in the Republic of Serbia.

Based on the Eurostat data for 2019, the Commission established that the prices of consumer electronics in the Republic of Serbia are by 13 percent higher than the EU average. In light of the findings above, the Commission has analyzed the conditions of competition on the wholesale and retail market for consumer electronics in the Republic of Serbia. Accordingly, and upon consulting the public data on prices, it is established that in retail outlets, as well as in online sales of the retailer concerned, Nespresso coffee machines are sold at identical or nearly identical prices on the market of the Republic of Serbia.

The Commission found reasonable grounds to believe the existence of resale price maintenance practices carried out by company SF1 Coffee as an importer and distributor of the products concerned, which represent a form of restrictive arrangement, i.e., an act of infringement of competition referred to in Article 10 of the Law.

All persons in possession of data, documents, or other relevant information that could contribute to the accurate fact-finding in this proceedings are invited to submit said evidence to the Commission for Protection of Competition, 25 Savska St., 4th Floor, Belgrade.

The Commission for Protection of Competition instituted ex officio proceedings to investigate infringements of competition, and carried out dawn raids at business premises of companies Roaming Electronics d.o.o., Tehnomanija d.o.o., and Comtrade Distribution d.o.o., to investigate the existence of restrictive agreements referred to in Article 10 of the Law on Protection of Competition, which restrict competition on the retail and wholesale market for consumer electronics in the Republic of Serbia.

Based on the Eurostat data for 2019, the Commission established that the prices of consumer electronics in the Republic of Serbia were by 13 percent higher than the EU average. For example, the prices of certain product categories in the Republic of Serbia were by 33-39 percent higher than the prices in Hungary, where the current value-added tax (VAT) rate is set at 27 percent, while the VAT rate in the Republic of Serbia currently stands at 20 percent. Furthermore, the prices of consumer electronics in Hungary were below the EU average by 2.5 percent.

In light of the findings above and noting the importance of this particular market for consumers, the Commission analyzed the conditions of competition on the wholesale and retail market for consumer electronics in the Republic of Serbia. Accordingly, and upon consulting the public data on prices, it is established that in retail outlets, as well as in online sales of related retailers, consumer electronics are sold at identical or nearly identical prices.

The Commission found reasonable grounds to believe the existence of obligations (contractual) imposed by said undertakings acting in concert, establishing the prices and conditions of trade in resale, which represents a form of restrictive agreement and an infringement of competition referred to in Article 10 of the Law.
All persons in possession of data, documents or other relevant information that could contribute to the accurate fact-finding in this proceedings are invited to submit said evidence to the Commission for Protection of Competition, 25 Savska St., 4th Floor, Belgrade.

The Sector Inquiry into the Rail Freight Transport Market in the Republic of Serbia is done in cooperation with the WB Group representatives under the Serbia Investment Climate Program. Under the Program, the Government of the Republic of Serbia and the International Finance Cooperation have signed the Agreement on Cooperation envisaging, inter alia, the provision of technical support by the WBG to the Commission for Protection of Competition to boost competition and regulate markets in the Republic Serbia. The selection and prioritization of sectors are carried out based on the WBG Markets and Competition Policy Assessment Tool (MCPAT). For the purposes of this project, the inquiry was conducted by the Compass Lexecon and Karanović & Partners Consortium.

The subject of the inquiry is the market for cargo transportation by railway, providing an in-depth analysis of the competition environment of this market along the value/supply chain, market structure and dynamics, regulatory environment and market performances, in addition to identifying practices and rules that can distort the level playing field and facilitate non-competitive market outcomes.

The inquiry found no material elements that would indicate an infringement of the competition rules. Instead, the main reasons for insufficient market development established in the Report are as follows: low quality of rail infrastructure, outdated train path allocation procedures, and the lack of intermodal transport terminals, constituting substantial barriers to entry and business growth. Despite the deficiencies noted, it is established that the cargo transportation market in the Republic of Serbia is still in the early stages of development since it is open to competition only since 2016. As one of the reasons for such suboptimal situation, the authors also state the domestic price regulation policy in force, noting that the fixed tariffs for national transportation services as provided by the Government of the Republic of Serbia hinder price competitiveness.

The Commission hereby wishes to express its gratitude to all undertakings providing requested information during the inquiry and invites all persons and other experts to provide their commentaries to the Report no later than September 10, 2020, to the email address office.kzk@kzk.gov.rs, with annotation: Commentary to the Sector Inquiry into the Rail Freight

Merger parties

In the case of a merger referred to in Article 17(1/1) of the Law on Protection of Competition (Official Gazette of the RS 51/09 and 95/13, hereinafter – the Law), the parties to the merger are understood to be all undertakings involved in the status change.

In the case of a merger referred to in Article 17(1/2) of the Law, the parties to the merger are understood to be the undertaking acquiring direct or indirect control (acquirer of control or notifying party pursuant to Article 63(3) of the Law) and the undertaking or a part of an undertaking over which control is acquired. Regarding the applicability of said article, i.e. determination of requirements for merger notification, the acquirer of control is the whole group of companies within which the notifying party operates and is a part thereof within the meaning of Article 5 of the Law.
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The Regulation on the application of deadlines in administrative proceedings during the state of emergency (Official Gazette of the RS 041/2020, hereinafter – the Regulation), which entered into force on March 24, 2020, provides for the treatment in respect of the application of deadlines in administrative proceedings during the state of emergency.

The National Assembly of the Republic of Serbia enacted the Decision on the abolition of the state of emergency (Official Gazette of the RS 065/2020), which entered into force on the date of its publication in the Official Gazette of the RS, that is, on May 6, 2020.

Noting the fact that the state of emergency is lifted on May 6, 2020, the application of deadlines in administrative proceedings under the Regulation ceased to apply on the same date.

The deadlines expired during the state of emergency or deadlines expiring in the period from March 24-May 6, 2020, shall be considered expired upon the expiration of 30 days from the day of the abolition of the state of emergency (i.e. on June 5, 2020). This relates to deadlines prescribed by the Law on Protection of Competition (Official Gazette of the RS 51/09 and 95/13, hereinafter – the Law) for filing merger notifications and requests for individual exemption or deadlines for taking administrative actions, closing of administrative procedures (for example, decisions in merger cases) and deciding on the declared judicial remedies.

It follows therefrom that the parties to proceedings, pursuant to the Law, may be liable for the consequences of the improper performance and failure to act within the deadlines set in conclusions and other orders of the Commission for acting in ongoing administrative procedures, including proceedings instituted at the request of the party or ex officio. Under the Law, undertakings may be liable for the consequences of their improper performance and failure to act within the deadlines set in conclusions and other orders of the Commission in sector inquires.

The Regulation on the application of deadlines in administrative proceedings during the state of emergency („Official Gazette of the RS“, no. 41/2020, hereinafter – the Regulation), which entered into force on March 24, 2020, applies to administrative proceedings before the Commission, including concentration review proceedings and requests for individual exemptions of restrictive agreements, pursuant to the Law on Protection of Competition („Official Gazette of the RS“, nos. 51/09 and 95/13, hereinafter – the Law). The Regulation only refers to deadlines concerning written applications submitted during the state of emergency, and does not affect the implementation of other provisions in the Law, by-laws and other regulations.

In order to achieve legal certainty, protect the rights of the parties and foster the public interest, the Commission wishes to provide the following clarifications:

- while undertakings are still legally bound to notify concentrations and request individual exemptions, they shall not bear the consequences of their failure to comply with the deadlines set by the Law for notification of concentrations and requests for individual exemptions;

- deadlines expiring during the state of emergency, which concern taking administrative action, closing administrative proceedings (for example, adopting decisions in concentration summary proceedings) and deciding upon legal remedies, shall be deemed to have expired 30 days after the termination of the state of emergency;

- delivery of acts in administrative proceedings causing non-extendable deadlines to start running (acts such as decisions, resolutions closing the proceedings, resolutions on the protection of information), which occurs during the state of emergency, shall be deemed to have occurred, for the purpose of the prescribed deadlines, 15 days after the termination of the state of emergency;

- parties to the proceedings shall not bear the consequences of their failure to comply with the timelimit set in resolutions and other acts of the Commission requiring specific actions or conduct in ongoing ex parte and ex officio administrative proceedings; however, since the accurate and complete determination of facts is in the interest of the parties, the Commission invites them to act in a timely manner to the extent possible under the circumstances of the state of emergency;

- undertakings shall not bear the consequences of their failure to comply with timelimit set in resolutions and other acts of the Commission requiring their action in the context of sector inquiries.

While ensuring the consistent enforcement of this Regulation, the Commission will continue to decide on the rights and obligations of undertakings in accordance with the Law.