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

The main discussion topics related to activities implemented by the Commission for Protection of Competition aimed at advancing business environment in the Republic of Serbia, particularly those in relation to the accession of Serbia to the European Union, within Chapter 8: Competition Policy.

Dr. Obradović introduced Ambassador Fabrizi to the Commission’s activities to date and plans, particularly those concerning the alignment of competition policy legislative framework with the EU acquis.

It is underlined that competition policy in Serbia, and especially the work of the Commission for Protection of Competition, so far have positive assessed by the Brussels administration. In that context, President Obradović presented expectations that in this year’s EC Progress Report, the Commission for Protection of Competition will be again recognized as one of the parts of the Serbian administration whose operational activities are highly aligned with the EU acquis.

The Commission President also informed the interlocutor on project activities concerning the formation of the Western Balkans Forum of Competition Authorities, headquartered in Belgrade, as a jointly launched initiative by the Commission and EBRD. The parties also touched upon initial activities in relation to a Twinning project aimed at advancing the competition policy in Serbia, with the Italian Competition Authority selected as a partner institution. During the talks, particular emphasis is placed on a project segment with regard to training of judges of the Administrative Court, which should contribute to their advanced understanding of competition law and related implementation.

During the talks with President Obradović, Ambassador Fabrizi supported efforts of the Commission placed on securing a level playing field for all undertakings and underlined the importance of both further education on the competition policy on the market of the Republic of Serbia and continuous improvement of the Commission’s work.

The Commission for Protection of Competition conducted a competition conditions inquiry into the tire market on the territory of the Republic of Serbia in the period 2014-2016.

The research is conducted with a view to achieve more qualitative and comprehensive approach in the work on sector-related cases. In that respect, the inquiry’s main objective related to the establishment of market structure, market coverage, relations between competitors and their respective market shares.

This inquiry is prepared in accordance with the provision of Article 21(1/6) of the Law on Protection of Competition, stipulating the Commission’s competence to monitor and analyze conditions of competition on individual markets and in individual sectors.

For the purposes of this inquiry, the following relevant markets are defined and individually analyzed:

• motor vehicle tire market,
• bus and truck tire market,
• motorcycle and bicycle tire market,
• agricultural vehicles and machinery tire market,
• construction and industrial vehicles and machinery tire market.

The Commission also analyzed the production and import as segments of supply, in addition to the export and sales on the domestic market as segments of demand for the tires concerned.

The main sources of data and information for the preparation of this inquiry are data provided by the Customs Administration of the Ministry of Finance, data submitted by undertakings, as well as publicly available data, including Internet-based data and current regulations. The Commission forwarded requests for the submission of information to tire manufacturers in Serbia, namely: Tire manufacturing company Tigar tyers doo Pirot, companies Trayal korporacija ad Kruševac and Cooper tire & rubber company Serbia doo Kruševac, in addition to the largest tire dealers and sellers.

On February 23, 2018, the Administrative Court delivered a judgment on the annulment of a decisionof the Commission for Protection of Competition on the establishment of competition infringement by company EPS Distribucija. The case is referred back to the Commission for assessment.

The contested decision of the Commission enacted on December 23, 2016, established that company EPS Distribucija has abused dominance on the relevant market of electric power distribution on the territory of the Republic of Serbia by applying dissimilar conditions to equivalent operations with respect to a variety of undertakings, by which individual undertakings are placed in unfavorable position against competitors, and by imposing unfair business conditions. The decision imposed a measure for protection of competition, measures for removal of competition infringement and deadlines for execution thereof.

By acting on the statement of claims of January 26, 2017 submitted by EPS Distribucija for the annulment of the Commission’s Decision, the Administrative Court rejected the statement of claims as unfounded. EPS Distribucija filed before the Supreme Court of Cassation the Review petition of the court’s ruling – The Administrative Court’s Judgment. The Supreme Court of Cassation delivered a judgment, accepting the petition of company EPS Distribucija, setting aside the mentioned judgment of the Administrative Court, and referring the case back to the Administrative Court for judgement.

In the enforcement of the judgment of the Supreme Court of Cassation, the Administrative Court delivered a judgment on the acceptance of statement of claims and annulment of the Decision, referring the case back to the Commission for assessment, due to the infringement of rules of procedure.

In the judgment concerned, the Administrative Court failed to establish whether EPS Distribucija has abused the dominant position, but has ordered the Commission to remove the deficiencies identified, and to enact a decision in this case on the basis of such established facts.

Within the statutory time limits, the Commission will act on orders from the judgment of the Administrative Court and enact a new decision, and depending on the facts and circumstances established, will impose appropriate measures.

The Commission will in this case as well, consistently implement the Law on Protection of Competition in order to achieve economic prosperity and well-being of the society, and especially the benefit of the consumers, striving to secure the equal treatment, legal certainty and predictability in acting for all undertakings, regardless of their size and forms of ownership.

As part of a joint initiative with the Commission for Protection of Competition, the European Bank for Reconstruction and Development (EBRD) appointed the Center for Liberal-Democratic Studies (CLDS) as a consultant for the provision of support services in designing, setting up and operative management of a regional forum of competition authorities, covering all Western Balkan countries, as well as EU member countries, Slovenia and Croatia.

By working directly with the Commission and the European Bank for Reconstruction and Development, CLDS will work on defining the recommended structure and management mode of this regional forum, which is foremost directed at enhancing the mutual exchange of information in terms of competition policy implementation, including the instituted infringement proceedings.

The objective of this forum is regional harmonization in competition law implementation by way of alignment against the best global practices in the related field.

The Commission for Protection of Competition instituted proceeding ex officio for investigating the infringement of competition against SERBIA BROADBAND – SRPSKE KABLOVSKE MREŽE DOO BEOGRAD for establishing the existence of abuse of dominance, within the meaning of Article 16 of the Law on Protection of Competition.

By analyzing the report on the fulfilment of conditions stipulated by the Commission’s decision no. 6/0-03-01/2017-26 of March 13, 2017 in relation to company SBB, conditionally approving the implementation of concentration created by acquisition of control on the part of company SBB over company Interaktivne kablovske objedinjene mreže – I.KOM d.o.o, the Commission gained knowledge that company SBB, as of January 1, 2018, increased the monthly service fee for maintenance of cable-distribution system and provision of cable TV for 100.00 dinars, that is, established the related fee at the level of 1,395.00 dinars.

As company SBB failed to present sufficient evidence on the reasonableness of costs pertaining to the monthly service fee for maintenance of cable-distribution system and provision of cable TV in the amount of 1,395.00 dinars, in accordance with Article 41 of the Law on Protection of Competition (Official Gazette of the RS 51/2009 and 95/2013 – hereinafter referred to as the Law) the Commission will establish the facts, that is, whether the price of related service is set in an unfairly high amount, which may lead towards the exploitation of service users.

All persons in possession of data, documents or other relevant information that could contribute to the fact-finding in this proceeding are called upon to submit the said to the Commission for Protection of Competition at the address 25, Savska St., Belgrade.

President of the Commission for Protection of Competition Dr. Miloje Obradović participated at the 2018 Kopaonik Business Forum – panel discussion “Antitrust compliance: Where companies go wrong and how to prevent them from doing so?”.

Besides Dr. Obradović, competition panel participants were Prof. Dr. Miroljub Labus (Faculty of Law in Belgrade), Ana Tozzi (Foreign Investors Council) and Dragan Lupšić (Coca-Cola), while Prof. Dr. Dragan Lončar (Faculty of Economics in Belgrade) moderated the discussion.

President Dr. Obradović underlined that a qualitative legal framework is the key prerequisite for efficient implementation of antitrust policy, in addition to the institutional independence of competition authorities. Of no less importance is consistent implementation of regulations, said Dr. Obradović.

“Our goal is to create a competitive market where undertakings will increase their productivity, innovations and investments, consequently generating economic prosperity, well-being of the society and the benefit of the consumers. For that reason, the Commission sees the increase of influence of antitrust policy on the economy as its key mission”, underlined the Commission President.

Dr. Obradović emphasized that the Commission will be even more focused on intensified regional cooperation in the period to come, and announced soon opening of the Western Balkans Forum of Competition Authorities, headquartered in Belgrade. The Commission implements this project under the auspices of the European Bank for Reconstruction and Development, with the support of the European Commission.

“What do we expect in the future: tradition – to continue with our track record, trust – to continue building it even further, transparency – to secure legal safety for undertakings by having a consistent approach to proceedings, but also the positioning of the Commission and further organic growth and institutional strengthening”, said Dr. Obradović during the panel discussion.

Ana Tozzi underlined the importance of creating an equal-level playing field. “The country is accessing to the EU, and the economy should be able to handle the competitive pressure, and to do so, you need to have a company built on strong foundations”, Tozzi concluded at the panel
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Prof. Dr. Labus reminded the audience that not so long ago Serbia was outside the market trends. For that reason, the key task of competition policy today is to prevent abuses of dominance in all sectors of the economy.

During the panel discussion, Dragan Lupšić underlined the importance of education of all undertakings on antitrust policy.

The competition panel was attended by a great number of the Business Forum participants, representatives of the academic and expert public, companies and law offices.

At this year’s Business Forum, the Commission is also represented by members of the CPC Council Mirjana Mišković Vukašinović and Marko Obradović, in addition to Dr. Siniša Milošević, Head of the Economic Analysis Division and Gordana Lukić, Special Advisor at the Assessment of Concentrations Division.

At the 2017-2018 Competition Advocacy Contest: Closing the gap through competition advocacy: microeconomic policies, macroeconomic implications, traditionally launched by the International Competition Network (ICN) and the World Bank Group (WBG), the Commission for Protection of Competition received the Honorable Mention award.

The award is granted in a competition of more than 50 papers from 30 jurisdictions around the world, divided into four categories. The papers were reviewed by a panel comprised of renowned competition policy experts from the WBG and ICN.

The paper prepared by, Sunčica Đorđević, Senior Advisor, Miki Vidaković, Independent Advisor and Maja Dobrić, Advisor – all from the CPC Competition Infringements Division, competed within the category “Creating markets for private sector development”.

Awarded papers will be published, while a formal award ceremony will be organized at the ICN Annual Conference event, to be held this year in India. The Commission for Protection of Competition of the Republic of Serbia is one of more than 140 members of the International Competition Network (ICN).

This contest, launched on annual basis, aims to highlight the key role competition agencies play in promoting competition by showcasing their advocacy success stories. The Commission was also awarded last year in the 2016-2017 Competition Advocacy Contest in the category “Implementing advocacy strategies at multiple levels (regional, national, subnational, economic wide and sector specific)”.

The fact that the Commission for Protection of Competition is awarded for the second year in a row for accomplished activities in competition advocacy is the proof of its genuine dedication to developing awareness on the importance of competition policy.

Activities of the Commission for Protection of Competition aimed at advancing business environment in the Republic of Serbia, particularly those related to negotiations within Chapter 8: Competition policy, were the main meeting topics between Dr. Miloje Obradović, President of the Commission for Protection of Competition, and Azra Iković from the EC Directorate-General for Neighbourhood and Enlargement Negotiations.

Dr. Obradović introduced guest to the Commission’s operational activities and plans to date, particularity those concerning the compliance of legal framework governing the institution’s activities with the EU acquis. The Commission prepared three draft regulations which are currently in the regulatory approval process, wherewith the current legal framework is being fully aligned against the National program for adoption of the EU acquis, Dr. Obradović emphasized.

It is highlighted that competition policy in Serbia, and particularly operational activities of the Commission for Protection of Competition, are favorably assessed by the Brussels administration. Namely, in the last EU Progress report, as well as during informal talks with the EC representatives, the Commission for Protection of Competition is recognized as one of the Serbian public institutions whose operational activities have mostly been harmonized with the EU acquis.

The Commission’s President also informed Ms. Iković on project activities concerning the creation of the Western Balkans Forum of Competition Authorities, headquartered in Belgrade, an initiative jointly instituted by the Commission and EBRD.

President Obradović also presented directions taken in the ongoing advancement of competition policy framework in Serbia, in addition to competition advocacy activities implemented by the Commission. To that end, DG NEAR representative supported and emphasized the importance of further advancement of CPC activities.

On the session held on February 2, 2018, the Council of the Commission for Protection of Competition enacted a decision on conditional approval of concentration created by acquisition of control on the part of company Compagnie des Lesaffre S.A. over company Altech Serbia Fermentaciona industrija d.o.o. Senta.

Based on the facts determined during the investigation procedure, the Commission established that company Altech will create a dominant position of on the yeast extract production and sales market by way of the merger, with the concurrent strengthening a dominant position on the baker’s yeast production and sales market in the Republic of Serbia.
The Commission particularly considered the statements provided by company Lesaffre that the implementation of this concentration will significantly improve the utilization of production capacities of the target company, yeast extract exports, and thus increase the operating efficiency.

The Decision sets conditions in the form of behavioral measures and mandatory regular reporting to the Commission with the goal of preserving and further advancing production capacities of baker’s yeast and yeast extract in the Republic of Serbia.

Periodical reports to be submitted to the Commission will contain:
1. Data on the rate of production capacity utilization of company Altech
2. Data on the yeast extract production of company Altech
3. Data on the baker’s yeast production of company Altech
4. Rationale on potential service production termination, in case of contract termination with the only company’s buyer to date, before the specified date of termination set in the contract.

By implementing proposed special conditions and upon analysis of submitted reports, in full and complete consideration of the importance of this market, the Commission will monitor whether and to what extent the business plans and motives for the implementation of this concentration as presented by Lesaffre are implemented, assessed as favorable effects of concentration during the investigation process conducted by the Commission.