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.

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.

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.

The Commission for Protection of Competition concluded a sector inquiry into the oil derivatives retail market in 2016 in the Republic of Serbia. The subject of the inquiry was the establishment of relations between main competitors in defined market segments with the objective to conduct a comparative inquiry into fluctuations of individual categories and identify potential market weaknesses.

The integral part of the report relates to derived conclusions based on which, inter alia, tendencies may be perceived, both on the oil production and processing market and on the oil derivatives retail market, as well as the structure and fluctuation trends in retail prices of selected oil derivatives.

The Commission assessed a level of compliance with the recommendations provided in previous reports, and once again pointed to the significance of establishing a precise statistical records on oil and oil derivatives, in addition to the importance of cooperation with other competent institutions towards creating a legal and business environment to advance the free market competition.

Considering the importance of the oil sector for energy activity and overall industrial development, as of March 1, 2018, the Commission will open a competition conditions inquiry into this market for 2017.

The Commission wishes to express its gratitude to all undertakings for their duly submission of requested data during the competition conditions inquiry process, and at the same time calls upon undertakings and other expert public to submit their comments to the report, as well as suggestions for the continuance of the inquiry, no later than February 28, 2018, to email address: office.kzk@kzk.gov.rs, with the subject line: Comments to the sector inquiry into the oil and oil derivatives market.

The Commission for Protection of Competition conducted a competition conditions inquiry into the sports footwear, clothing and equipment market on the territory of the Republic of Serbia.

The inquiry is conducted with the objective of establishing more qualitative and comprehensive approach in cases concerning this sector, but also towards raising awareness and education level of undertakings, since all, including this activity as well, are directed at securing efficient competition on the territory of the Republic of Serbia.

The subject of the inquiry related to the collection and elaboration of data on procurement and sales of sports footwear, clothing and equipment in the period 2014-2016. In line with the data submitted by undertakings for inquiry-related purposes, the Commission analyzed the market structure, relations between main competitors and their market shares. In this respect, researchers have established a dynamic growth, high concentration of observed markets, as well as revenue increase of all undertakings generated from the sales to end-users and other dealers. Considering all specificities of this market, the Commission will continue to monitor the sector concerned with a particular attention in the period to come as well.

The Commission wishes to express its gratitude to all undertakings for their duly submission of requested data during the competition conditions inquiry process, and at the same time calls upon undertakings and other expert public to submit their comments to the report, to email address: office.kzk@kzk.gov.rs, with the subject line: Comments to the sports footwear, clothing and equipment market inquiry.

The Commission for Protection of Competition also conducted a competition conditions inquiry into software and IT equipment market on the territory of the Republic of Serbia.

For the inquiry related needs, the Commission identified two relevant markets within a wider information and communication technology (ICT) market – software wholesale market, and hardware wholesale market (computers and IT equipment). Within such defined markets, particular attention is placed on the software and IT equipment public procurement markets.

The basic objective of the inquiry was to estimate the size and volume of defined markets, identify the most important undertakings operating on such defined markets and to assess their market share, as well as respective relative market power.
The subject of this inquiry related to the collection and elaboration of data on generated sale revenues pertaining to the software and computers and IT equipment on the domestic and foreign markets, as well as on generated revenues based on the participation ratio in public procurement procedures.

The inquiry used data provided by the Public Procurement Office on implemented software and IT equipment public procurements from 2014-2016, in addition to the conducted investigation into the largest software and IT equipment manufacturers and distributors founded on 42 company-based sample. For the inquiry related needs, the Commission also used publicly available data and information on the ICT sector, data from the balance of services published by the National Bank of Serbia, and data provided by the Statistical Office of the Republic of Serbia.

The Commission wishes to express its gratitude to all undertakings for their duly submission of requested data during the competition conditions inquiry process, and at the same time calls upon undertakings and other expert public to submit their comments to the report, to email address: office.kzk@kzk.gov.rs with reference: Comments to the software and IT equipment market inquiry.

The Commission for Protection of Competition established the infringement of competition and imposed a measure for protection of competition against 15 undertakings operating on the sports clothing, footwear and equipment wholesale and retail markets.

It is established that undertakings „N SPORT“, „PREDUZEĆE ĐAK“, „OFICCE-SHOES“, „PLANETA SPORT“, „CARVEL“, „SPORTMARKET“, „TOTAL SPORT“, „SPORTIKO“, „UNIVERS-CO“, „EUROSTAR“, „TRIM DOO VRBAS“, „K..G…FASSHION“, „KOPELLI“, „STR FOKUS“ and „KOMISION SPORT ONE“ have concluded restrictive agreements – agreements of purchase and sale containing provisions that regulate prices in further sales, which represent the infringement of competition from Article 10 of the Law on Protection of Competition. The Commission established that certain provisions of concluded agreements represent a mutually agreed commitment that in a prohibited manner regulate prices and conditions of trade.

On August 18, 2016, the Commission carried out a dawn raid at the business premises of company “N-SPORT” and collected information, data and agreements concluded by this company with its buyers.

In accordance with the collected information and documents, company “N-SPORT”, acting as a seller, concluded agreements of purchase and sale with other undertakings, containing buyer’s commitment to maintain minimum retail prices in further sales established by “N-SPORT”. This commitment particularly related to brands PUMA, RUSSSELL ATHLETIC, SERGIO TACCIHINI and others. Also, agreements envisaged the prohibition of sales promotions and other forms of favorable sales without prior approval of the seller, i.e. “N-SPORT”.

The measure for protection of competition is imposed in the total amount of RSD 45,279,975.78, and specifically for: „N SPORT“ – RSD 16,525,732.75, „PREDUZEĆE ĐAK“ – RSD 15,850,569.60 „OFFICE-SHOES“ – RSD 2,705,138.00, „K… G… FASHION” – RSD 459,256.00, “SPORT ONE” – RSD 99,648.00, „TRIM“ – RSD 82,336.00, „CARVEL“ – RSD 1,307,906.00, „EUROSTAR“ – RSD 69,644.88, „STR FOKUS SNEŽANA ZLATKOVIĆ KOSTOV PR“ – RSD 44,263.37, „SPORTMARKET“ – RSD 44,202.00, „UNIVERS-CO“- RSD 2,776,959.18, „TOTAL SPORT“ – RSD 25,626.00, „KOPELLI“ – RSD 31,402.00, „SPORTIKO“ DOO – RSD 127,050.00 and „PLANETA SPORT“ – RSD 5,212,578.00, required to be executed in favor of the Budget account of the Republic of Serbia within six months period.

By means of conclusion enacted by the Commission President of October 10, 2017, proceeding is continued ex officio, instituted upon notification of concentration of company Compagnie des Levures Lesaffre S.A., France, created by acquisition of individual control over company Alltech RS Fermentaciona Industrija LLC Senta.

During the investigation procedure, the Commission will investigate as to whether concentration concerned fulfils the conditions of permissibility from Article 19 of the Law on Protection of Competition, or respectively on the possibility of significant restriction, distortion or prevention of competition on the market of the Republic of Serbia or its part by implementing the related concentration, and especially if such restriction, distortion or prevention would be the result of creating or strengthening of a dominant position.

The Commission will conduct all necessary activities, establish all facts and derive evidence necessary to define the relevant market(s), structure of the relevant market(s), degree of concentration on the relevant market(s), identification of actual and potential competitors, market position of participants in concentration, legal and other barriers to enter on the relevant markets, interests of consumers, etc.

The Commission calls upon all persons in possession of data, documentation or other information that might contribute to the accurate fact-finding in this proceeding to submit the said in the shortest possible time to the Commission to the address: 25/IV Savska St., Belgrade.

At the session of the Committee on the Economy, Regional Development, Trade, Tourism and Energy of the National Assembly of the Republic of Serbia, members of the Committee have reviewed the Operations Report for 2016 of the Commission for Protection of Competition.

President of the Commission for Protection of Competition Dr. Miloje Obradović informed the Committee members that 2016 was the jubilee year of operating activities of the Commission for Protection of Competition. He emphasized that the Commission in accordance with its legal competences, efficiently implements all activities toward securing protection of competition in the Republic of Serbia.

Dr. Obradović stated that during the reporting period, inter alia, activities within the accession process of Serbia to the EU are continued, as well as that the said activities were positively assessed on the part of the European Commission in regard the screening outcome for Negotiation Chapter 8.

Following the rationale to the Operations Report of the Commission for Protection of Competition, President of the Committee proposed the adoption of the Report of the Commission for Protection of Competition, which was accepted by the majority of votes of the Committee members.

The session was headed by the President of the Committee Snežana B. Petrović, and attended by members and deputy members of the Committee, as well as members of the Council and officials of the Commission for Protection of Competition.

The Commission has extended the deadline for submission of comments and opinions to the Draft Regulation on Technology Transfer Agreements Exempt from the Prohibition, and Draft Regulation on Agreements between Undertakings Operating in the Rail, Road and Inland Waterways Transport Sector Exempt from the Prohibition, to October 17, 2017.
Undertakings, business associations, law offices, expert public and all other interested parties may submit to the Commission their comments and opinions in reference to the texts of Draft regulations via email address komentar@kzk.gov.rs.