The Anti-Corruption Agency, Commission for Protection of Competition and Republic Commission for Protection of Rights in Public Procurement Procedures have signed the Agreement on cooperation. The Agreement is signed by Tatjana Babić, the Agency Director, Miloje Obradović, PhD, the Commission President, and Hana Hukić, the Republic Commission President.
The Agreement is signed on the sidelines of a workshop on public procurements in the light of issues regarding the fight against corruption and protection of competition, held from 8-9, November in Aranđelovac, organized by the Organization for Security and Co-operation in Europe.
This represents the expression of readiness for cooperation aimed at the protection of public interest, reduction of corruption-related risks and strengthening of institutional integrities.
The workshop analyzed issues related to the protection of rights in public procurement procedures, determination of conflict of interests with reference to the conflict of interests in public procurements, public procurements and competition policy, and setting of a joint cooperation areas in the context of the Public Procurement Law, Law on the Anti-Corruption Agency and Law on Protection of Competition. (Photo:OSCE/Milan Obradović)
Beginning October, a presentation titled Market Analysis of Aftersales Service (Aftermarkets) was held at the Commission for Protection of Competition’s premises. Representatives from the Commission for Protection of Competition, Public Policy Secretariat of the RS, PERFORM Project, in addition to research team members of the Institute for Economic Sciences participated in the meeting. The information on this activity was published on the PERFORM Project website as well.
The Commission for Protection of Competition is one of the PREFORM project beneficiaries. The PERFORM project, implemented by Helvetas Swiss Intercooparation SRB representative office, in cooperation with the Public Policy Secretariat of the Republic of Serbia, is implementing four pilot-projects aimed at straightening of evidence-based policy making.
Apart from that, the basic goal of the review on competition related implications on aftermarkets, including guarantees, customer service, turnover and the use of spare parts for motor vehicles and top selling home appliances, was to determine the structure and relations between main market actors, their market shares and relative power, aimed at detecting possible market deficiencies, i.e. presence of competition infringements conditions. The analysis developed a series of conclusions and recommendations that will be published on the website, following the concluding adoption procedure by the Commission’s Council.
During the meeting, all project partners praised the high quality of established collaboration during all project implementation phases and expressed their satisfaction with project related participation. The Commission’s representatives expressed their pleasure with achieved study’s results that provided answers to basic investigation tasks as defined by the project’s ToR.
The report on performed analysis will be published on the Commission’s webpage, taking into consideration undertakings request for protection of specific data. Apart from the call addressed to undertakings to submit their comments to the Commission, the Report will be forwarded to state institutions, identified as responsible for certain issues in the study (Ministry of Trade, Tourism and Telecommunications, and Ministry of Construction, Transport and Infrastructure).
On the basis of analysis results, a regulation on the group exemption of vertical agreements in the motor vehicle sector will be drafted, thus transporting the EU Commission Regulation 461/2010 into our legislature. Apart from the said, additional investigation will be placed on observed cases that could limit, prevent or disturb the competition on specific markets. Following investigation of certain cases, it will be decided on the existence of a sufficient basis for initiation of competition infringement processes, or merely on drawing the attention of undertakings to certain rules in the context of competition policy.
PERFORM Program Officer Svetlana Kijevcanin announced a conference that will be held in early December where the operational model of all pilot projects will be presented together with the results of all four research studies.
PERFORM website link for related news published in English:
http://www.perform.network/en/news-and-events/43_research-results-on-market-analyses-of-aftersales-services/
The Commission for Protection of Competition, based on the Commission President’s Resolution, dated August 29, 2016, initiated competition infringement procedure ex officio against company “INTER TURS PLUS” from Aranđelovac.
Based on data, information and documents collected, the Commission reasonably assumed a violation of competition having, or likely to have as their object or effect, significant restriction, distortion or prevention of competition.
During the conduct of procedure, the Commission will investigate whether the named company, as a controller of a single bus station in Topola, by increasing bus station platform cost – bus dispatch services, committed the abuse of a dominant position. Bus platform selling price in the amount that is unfairly high, which leads to the exploitation of service users, can constitute an act of the abuse of a dominant position stipulated under Article 16 of the Law on Protection of Competition.
The Commission for Protection of Competition initiated proceedings against 16 wholesale and retail of sportswear, footwear, equipment and accessories undertakings.
The proceedings were initiated on the grounds of reasonable presumption of existence of competition infringement pursuant to Article 10 of the Law on Protection of Competition, an activity restricting the competition on retail and wholesale markets of sportswear, footwear, equipment and accessories market in the Republic of Serbia. The undertakings against whom the proceedings were initiated are as follows: „N SPORT“, „PREDUZEĆE ĐAK“, „OFFICE-SHOES“, „PLANETA SPORT“, „CARVEL“, „SPORTMARKET“, „ZVEZDA FOREVER“, „TOTAL SPORT“, „SPORTIKO“, „UNIVERS-CO“, „EUROSTAR“, „TRIM DOO VRBAS“, „K..G…FASSHION“, „KOPELLI“ and „STR FOKUS“ and „KOMISION SPORT ONE“.
On August 18, 2016, the Commission performed a down raid at the business premises of the „N Sport“ company and acquired information, data and contracts which this company has entered into with its customers. The down raid was conducted due to the existence of a reasonable doubt of danger of disposal or altering evidence held by the party in the proceedings.
According to the collected information and documents, the „N Sport“ company, as the seller, has entered into contracts on business cooperation with other undertakings against whom the Commission has initiated proceedings, which contained an obligation for the customers to comply with the minimum retail price set by the „N Sport“ in the resale of their products. This obligation particularly pertained to the brands PUMA, RUSSELL ATHLETIC, SERGIO TACCHINI and others. Also, the contracts contained a prohibition of special sales actions and other forms of favorable sales without prior approval of the seller, i.e. the „N Sport“.
The Commission reasonably assumed that certain provisions of the concluded contracts represent a mutually agreed obligation, by way of which prices and terms of trade are set in an illegal manner, which constitutes a restrictive agreement and infringement of competition pursuant to Article 10 of the Law on Protection of Competition. Restrictive agreements are agreements between undertakings, the object or effect of which is to considerably restrict, distort or prevent competition on the territory of the Republic of Serbia, and in particular those agreements which directly or indirectly set purchase or sale prices or other terms of trade in the resale of products.
The Commission invites all the parties who may possess data, documents or any other relevant information which may contribute to determining the facts in these proceedings, to submit them at the address of the Commission for Protection of Competition, Savska 25/IV, Belgrade.
During the session held on August 11, 2016, the Commission for Protection of Competition’s Council enacted decision on conditional approval of implementation of concentration created by the change of control of the Sunoko d.o.o Novi Sad company over Star Šećer d.o.o. Senta company, and consequently over TE-TO Senta A.D. sugar factory.
Based on the state of the matter determined during investigation procedure, the Commission concluded that by implementing of concentration, the Sunoko’ dominant position shall be strengthened, foremost in the sugar production and sugar distribution markets in the Republic of Serbia. For those reasons, implementation of the mentioned concentration can be approved only if accompanied by certain conditions prescribed by the decision. The Commission for Protection of Competition believes that by determining behavioral measures referring to Sunoko d.o.o Novi Sad, secures a prevention of potential adverse effects of the concentration in question.
The decision imposed conditions in a form of behavioral measures and mandatory regular reporting towards the Commission with the goal of securing market structure and retaining all production capacities, including the TE TO Senta sugar refinery on the market, transparent monitoring of the level, alterations in sugar prices on the market, improvement of sugar sale policy’s transparency and consumer business relations, as well as full disclosure of information to the Commission on the level and type of investments to be implemented in the TE TO Senta with the aim of increased production effectiveness, in the following manner:
1. Reporting on the processed sugar beets and manufactured sugar, separately for each of the sugar refineries owned by Sunoko.
2. In the case of liquidation, or Sunoko’ decision resulting in permanent closing of some of sugar refineries under their management, Sunoko is obliged to previously publically announce the sale of sugar refinery’s equity or property in no less than three daily newspapers regularly distributed in the whole territory of the Republic of Serbia, and in one foreign newspapers specialized in economy and finances and published in the territory of the EU, or on an Internet portal usually utilized for distribution of business related news.
3. Obligation of reporting on prices, on consequential changes in sugar prices individually for the Serbian market, EU, CEFTA and eventually the third market, on FCO sugar refineries parity, VAT free, with the submission of a rationale on samples and intensity of consequential changes.
4. Obligation to, no later than in six months, submit to the Commission a document with which it defines its domestic costumer sugar sale policy.
5. Reporting on possible alterations of existing contracts between TE-TO Senta A.D. sugar factory and costumers, and a rationale of those.
6. Commitment of submitting annual reports on measures and activities taken with the goal of maintaining business operations of the TE-TO Senta A.D. sugar factory, which may include, but are not limited to the following: repayment or debts, assumption of other financial expenditures, transfer of technical and technological know-how and experiences, transfer of managerial know-how and experiences, measures that influence increase of production effectiveness and reduction of sugar cost prices, as well as other, direct or indirect, financial, technical and technological, managerial, and other measures.
Ordered measures (except under Item 5), shall be implemented until the abolition of customs duties and levies on sugar imports in the Republic of Serbia, and no longer than for period of subsequent five years from the Commission decision’s legal validity date. Measure under Item 5 shall be implemented ending 2017.
Throughout the investigation procedure, the Commission obtained necessary data, information, as well as opinions on the effects of concentration from competitors as the concentration participants, their biggest suppliers and customers, in addition to the state authorities and organizations in charge of data relevant to this proceeding.
During the determination of conditions for approval of concentration, the Commission also kept in mind opinions and views on the effects of concentration that other undertakings have presented in the course of the proceeding, particularly industrial costumers.
The Commission also had in mind financial position of the TE-TO Senta A.D. factory. Regulated conditions, deadlines and manners for monitoring of their execution should eliminate Commission’s concerns related to securing efficient protection of competition, via preserving production capacities, implementation of planned investments that can achieve increased production efficiency, and thus, lower sugar cost prices, alongside transparent sale policy (discount policy) and price policy (intensity and causes of price alternations).
The Commission for Protection of Competition, based on the Commission President’s Resolution, initiated competition infringement proceeding ex officio against (Electric Power Industry of Serbia – Distribution) EPS Distribucija company.
During the proceeding in question, the Commission will investigate if the mentioned company, as a single electric power distribution system operator in the Republic of Serbia has misused privileged position by placing the EPS Snabdevanje in a competitive advantage against all other commercial suppliers of electric power.
The EPS Distribucija has, as per reasonable assumption of the Commission, in the course of contracting access to the electric power distribution system imposed an obligation of depositing funds on restricted (guarantee) deposit for securing payment for system access service for all distributive system users, apart from its affiliate company, the EPS Snabdevanje.
The City of Pančevo Assembly informed the Commission for Protection of Competition on taking into account its opinion, and that has during the City Council’s session determined draft amendment to alter disputed decisions’ provisions regulating public utility burials and cemetery management service.
A decision on amendments to the Decision on burials and cemeteries, as per information sent to the Commission, shall be adopted by the City of Pančevo Assembly by end-July.
The Commission previously sent opinions to the Assemblies of Cities of Novi Sad and Pančevo on the necessity to amend, i.e. precise disputed provisions of decisions arranging this utility service, in order not to distort competition and enable monopoly to the public utility companies in those cities.
The Commission uses this occasion once more to emphasize the importance of the City of Pančevo Assembly’s conduct since the adoption of amendments to the disputed provisions of the Decision will have a positive impact on the competition. These amendments will enable performing of certain burial services to all interested parties, i.e. not only to the public utility company but also other companies, entrepreneurs, and other business entities.
The Commission for Protection of Competition during the previous period has received a great number of initiatives for initiation of proceedings for infringement of competition, related to bid rigging in public procurements.
In order to establish a future practice, and with the goal of enabling a higher level of legal security and transparency, the Commission presents the view on the implementation of Article 10 of the Law on Protection of Competition in the case of affiliated undertakings in the public procurement procedures.
The Ministry of Construction, Transport and Infrastructure accepted comments and suggestions of the Commission for Protection of Competition and altered the Draft Law on Amendments to the Law on Utility Services.
The bill proposer’s willingness to fully cooperate with the Commission is the best example of joint efforts directed toward more qualitative regulation that will enable more efficient market competition, which should contribute to the economic prosperity and wellbeing of society, and in particular for the benefit of consumers.
The Commission has sent remarks to the previous Draft Law text providing the Chamber of Commerce and Industry of Serbia to issue an act on the fulfillment of conditions for performing utility services to a public enterprise, company, entrepreneur or other business entity. According to the Commission’s opinion, this regulation would have presented an additional barrier to the entrance of new, as well as to the continuation of business operations of current market undertakings that are registered for providing utility services.
In the final version of the Draft Law, the Ministry also incorporated Commission’s suggestions that certain services which can be performed independently and are related to the utility services, be clearly determined as the services of a commercial nature (burial service) that can be provided by undertakings registered under equal conditions, and not exclusively by a public company or a company in which the Republic of Serbia or local self-government unit owns minimum 51% of shares.