The planned change in ownership interests in the said company occurring upon the abovementioned corporate action implementation, resulting in the change of number of control holders, where instead of current 9 (nine) members (each holding 11.1% of shares) the control will be executed by 11 (eleven) members (each with individual share of 9.09%), by its substance represents a concentration pursuant to Article 17(1/3) of the Law. Despite the fact that this business transaction will not result in the change of type and form of control, previously and henceforth jointly executed, it will result in the change of number of control holders over target company from nine to eleven. Having in mind that the company’s Memorandum of association stipulates the enactment of “the most important decisions by consensus of all shareholders”, representatives of two new company shareholders, as in the case of previous shareholders, will have the possibility of exercising decisive influence on the enactment of most important business decisions, or respectively hold the power of agreement for passing of company’s acts. With regard to the existence of legal obligation to notify the Commission on this concentration in terms of reaching financial thresholds envisaged in Article 61 of the Law, the Commission has informed the party on the non-issuance of opinions on requests when actual identities of parties involved are covert and concrete data on their financial power are omitted. For issuing opinions from the Commission’s competence, particularly when such requests also contain inquiry on the obligation to submit notification on concentration in regard to concrete transaction, in addition to data on transaction concerned (letter of intent, transaction agreement, etc.), parties to the request are required to submit all data concerning the identity of parties in related business transaction (name, seat, personal identification/company registration number, company’s main activity), as well as data on the total annual income of undertakings involved in observed concentration for the calendar year preceding the year of entry into transaction agreement, while all requested is in accordance with the provisions of the Law on Protection of Competition.

The planned recapitalization of Komercijalna banka in this phase, to be created via conversion of convertible preferred shares of its current shareholders into common bank shares, does not represent a concentration within the meaning of Article 17 of the Law, thus exists no obligation to notify the Commission on such transaction for issuing approval for its implementation. In the concrete case and based on submitted documents attached to the Request for issuing opinion, derives that on December 17, 2009, shareholders of Komercijalna banka, namely the Republic of Serbia, IFC Capitalization Fund (IFC), European Bank for Reconstruction and Development (EBRD), Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) and Swedfund International AB (Swedfund), have concluded the Agreement on Recapitalization of this bank via the issuance of convertible preferred shares. The EBRD, IFC, DEG and Swedfund have registered their convertible preferred shares in January 2010, while the Republic of Serbia was granted to register its shares no later than December 2012, a power exercised in November of the same year. On March 31, 2014, shareholders have signed the Agreement on Amendments to the Shareholders’ Agreement (i.e. Amended Shareholders’ Agreement) that regulates the intent of shareholders to perform the exchange of all issued convertible preferred shares no later than particular date. In the event of failing to perform the simultaneous exchange and completion by the due date set in the Agreement on Amendments to the Shareholders’ Agreement on the part of all shareholders in possession of issued convertible preferred shares, terms and conditions from the initial Shareholder’s Agreement, as well as terms and conditions governing the convertible preferred shares (contained in the decisions on their issuance). Upon implementing the conversion of shares, i.e. conversion of convertible preferred shares into common shares, previously mentioned shareholders’ share in the total equity interest of Komercijalna banka will remain unchangeable. In addition, there will be no changes in the number of preferred shares, while convertible preferred shares will be annulled. The sole change resulting from this transaction is reflected in a minor change of individual shareholders interest in the total number of common shares. This however will not cause any changes in the modality and manner of enacting the most important business decisions, thus will not cause any changes in executing operational controls in Komercijalna banka. Following this transaction as well, the Bank’s Assembly will continue to enact the most important business decisions with minimum 67% of votes of the total number of shareholders votes, wherewith it can be concluded that following the recapitalization of Komercijalna banka in this phase, the current joint control of its shareholders over business operations of this bank will remain unchanged.

On the occasion of issuing this opinion, the Commission has initiated from the transaction’s structure as described in the submission concerned. It is concluded that implementation of this planned business transaction represents the case of concentration between undertakings from Article 17(1/2) of the Law. This derives from the fact indicating to the creation of changes in the bank’s ownership structure as presented in the previously described recapitalization procedure of Dunav banka JSC, in a manner where Telecommunications company Telekom Srbija JSC Beograd will become its majority shareholder with 55.76% of shares. Although exists a possibility for this percentage to be altered and increased (while at the time of issuing this opinion such alternation could not be quantified) pursuant to the legal obligation to submit mandatory takeover bid to other Bank’s shareholders, such circumstance would in no manner have an influence on issuing different opinion of the Commission. Acquisition of the issuer’s shares (in this case, of the target company) following the recapitalization of Dunav banka JSC Beograd as presented in the submission for issuing opinion, points to the fact that Joint stock insurance company Dunav osiguranje Beograd (ICDO) will own 32.75% of shares (and with affiliated Joint stock insurance company Dunav Re Beograd, the said share will reach 36.39%). This company’s potential co-control function in Dunav banka JSC via veto instrument (on which as per submitted information exist no assurance) is significant in terms of assigning legal persons liable to submitting notification on concentration concerned before the Commission (depending on whether such shareholder would perform an individual control based on the majority shareholder’s interest in target company, or by jointly executing control with minority shareholder (entitled to the nominal value of shares) in target company pursuant to acquired and defined veto rights, in which case this would constitute a form of joint control implementation over Dunav banka JSC as the target company). Provisions concerning affiliated undertakings more closely defined in Article 5 of the Law and referred to by the party, are not applicable in the case of transaction and involved parties concerned. The current majority shareholder in target company (Joint stock insurance company Dunav osiguranje Beograd) and its future majority shareholder – following the implementation of planned recapitalization (Telecommunications company Telekom Srbija JSC Beograd), are not considered as affiliated undertakings pursuant to the Law, and to that end the Commission has replied that in order to implement this business transaction in full accordance with the Law, it is necessary to submit notification on concentration to the Commission.
Regarding the current track record indicating the reoccurring number or essentially similar issues presented by undertakings before the Commission for obtaining related opinions, and that such replies have been exclusively submitted to the request applicants, i.e. have not been published on the Commission’s webpages, the Commission plans to publish on its official website some sort of recapitulation summary of thus far issued opinions from the most frequently considered thematic areas. Such overview should serve as some sort of reminder of most frequently occurring situations and types of business transactions which derive obligations of undertakings against the Commission, publically available to all interested parties and as such representing a form of assistance for undertakings in terms of facilitated recognition of their legal obligations toward the Commission. That would at the same time and to a great extent contribute to reducing pressures toward the Commission as to the number of requests for issuing opinions.

Request summary: The request for issuing opinion on the implementation of Article 10 of the Law on Protection of Competition in the case of conducting activities on the part of Confectionary and Trade Concern Bambi Požarevac JSC Požarevac, implying the exchange of certain information with its competing parties (for instance: Soko Štark LLC Beograd and Jaffa LLC Crvenka) that directly or indirectly point to or reveal individual business strategies and activities pursuant to which certain particularities of the Concern’s business activities may be identified.

Issued opinion: The exchange of information that directly or indirectly are not affecting the future commercial strategies of undertakings, and if they are: anonymized and integrated, publically issued or available to consumers and competitors not participating in the exchange of information, is not considered questionable from the competition enforcement perspective. The exchange of business sensitive data (relating to the nature of business operations concerned, or respectively to the current or future prices, sale expenses and production volume, credit or trade conditions, promotional expenses, discounts and rebates approved to consumers, information on consumers and business or strategic and marketing plans, etc., and particularly if such data cannot be considered as historical data) enables undertakings to reach improved and faster adaptation of own business policies against their competing parties’ strategies, thus improves the probability of creating anticompetitive effects on the relevant market, or respectively rises concerns that such behavior might lead to the increased coordination when conducting certain activities.

Request summary – question: The case related issue relates to the right of undertakings operating on the iron and other waste metals repurchase market to refuse to repurchase waste materials when suspecting the manner of acquisition of such waste materials on the part of suppliers or third party suppliers.

Issued opinion: The case related practice of refusing to purchase or repurchase waste materials based on the personal doubt concerning the manner in which suppliers or third party suppliers have acquired the subject of (re)purchase does not represent an infringement of competition, because undertakings, as well as dominant undertakings are free to enact own business decisions and with whom they will enter into business relations, particularly in the case of well-supported grounds for the said behavior.

Request summary – question: The case related request is submitted for obtaining opinion concerning the implementation of competition policy regulations in public procurement procedures in situations when contracting authority for pharmaceuticals sets the obligation in tender documentation requiring bidders to submit authorization (power of attorney) of pharmaceuticals vendor. This authorization represents a written statement of pharmaceuticals vendor authorizing the addressee (bidder) to participate in the public procurement procedure and to resell pharmaceuticals. The issue relates to the right of pharmaceuticals manufacturer to refuse to issue such authorization to individual buyers with whom it does not have a distribution agreement. Withheld buyers would be left with an option to procure listed pharmaceuticals from distributors included in the selective distribution system.

Issued opinion: Pharmaceuticals manufacturer’s refusal to issue the authorization concerned, i.e. power of attorney to buyers not included in its selective distribution system is not considered as restriction of competition. Namely, if based on the selective distribution system, the sales management system of pharmaceuticals or other products represents the grounds of sales of pharmaceuticals on the territory of the Republic of Serbia. If a manufacturer would be deprived of the right to refuse to issue authorization to buyers/bidders who are not a part of the abovementioned system, it would indirectly alter the manner of sales and introduce the non-selective distribution system. On the other hand, this opinion is limited to the presented premises only, keeping in mind that provisions of the Regulation on agreements between undertakings operating at the different level of production or distribution chain exempted from prohibition, and related provisions of Articles 10, 11 and 14(1/2) of the Law, primary apply to the abovementioned selective distribution system.

Request summary – question: The case related request is submitted for obtaining opinion concerning the implementation of competition policy regulations to distribution agreements, or respectively on the following issues: restricting buyers from making passive sales to other buyers operating on other countries’ territories; incorporating other manufacturers’ components or other spare parts into contracted products; nonreciprocal or asymmetrical vertical agreements between competing parties; non-compete clauses and implementation of legal provisions governing agreements of minor importance to non-compete clauses.

Issued opinion: In regard to the implementation of competition policy regulations to contractual provisions restricting passive sales, the Commission has stated that restrictions of passive sales are prohibited and are not exempt from prohibition in terms of Article 5 of the Regulation on agreements between undertakings operating at the different level of production or distribution chain exempted from prohibition. As to the issue of incorporating other manufacturers’ components or other spare parts into contracted products, the Commission has restated its previously presented legal positions given in regard to issues of obtaining rights from manufacturers guarantees/warranties on faulty goods. As a general principle is stated that as per conditions stipulated in the guarantee/warranty letter, guarantee provider is free to condition consumer to preform product repair(s) exclusively with authorized service providers (certified by product manufacturers or dealers) and to install only original spare parts, having in mind that the guarantee provider bears all servicing costs independently from the manner in which the servicing costs refund system is regulated. Contractual non-compete clauses are exempt from prohibition as per categories of agreement, conditioned to 5-year limited duration period. Also, legal provisions governing agreements of minor importance relate to non-compete clauses as well. The Commission deems that if contractual parties fulfil conditions from Article 14 of the Law, the existence of non-compete clause and related contract duration in its own right does not have an influence on the potential “loss of status” of agreement of minor importance. If their market shares exceed thresholds from Article 14(1/2) of the Law, then it could not be referred to the agreements of minor importance, while accordingly could be potentially possible to implement the Regulation. This would further entail the implementation and time limitation of non-compete clause.

Request summary – question: The request for issuing opinion has related to the need to submit request for individual exemption from prohibition in the case when non-exclusive distribution agreement is signed by contracting parties that each individually hold a share in excess of 25% on the relevant market, whereas the manufacturer currently has only one dealer for selling of its products on the market, but can name other dealers as well or independently distribute on the identical territory. Hence the question on the need to notify the Commission on agreement for obtaining individual exemption from prohibition in the case when individual manufacturer de facto is currently operating with only one dealer, particularly considering the market shares of contracting parties.

Issued opinion: The Commission has not been able to precisely present its position in this concrete case in terms of the need to submit request for individual exemption form prohibition, considering that all necessary details prerequisite for issuing legal position were not provided. However, it has presented a general position relating to individual elements listed in the request that might assist in an independent assessment of obligations stipulated by the Law. In that manner, for non-exclusive and non-restrictive agreements envisaged by the Regulation on agreements between undertakings operating at the different level of production or distribution chain exempted from prohibition, is not necessary to submit request for individual exemption from prohibition even when signatory parties have individual market share in excess of 25%, because described case concerns agreements not belonging to either restrictive or prohibited group of agreements ‘by object’ or ‘by effect’, and which fall outside the Law. On the other side, the fact that individual agreement is not exclusive agreement de jure but de facto, may create an obligation to submit request for individual exemption from prohibition. The said foremost depends on the reasoning for nonexistence of other undertakings that can distribute the product/service concerned, and even if such distributors exist, for what reasons they are not interested or included in the distribution. It is also pointed to the case of potential dominant position of producer, pertaining to its individual liability within the meaning of Article 16 of the Law when conducting certain business activities.

Request summary – question: The Commission was requested to issue opinion pursuant to the Law on Protection of Competition, in regard to the status of Telecommunications company Telekom Srbija JSC Beograd in public procurements of fixed telephony services, when the said company holds no right to offer services under more favorable conditions to individual categories of users then from those approved in individual acts of the Regulatory Agency for Electronic Communications and Postal Services of the Republic of Serbia.

Issued opinion: The Commission’s reply contains information that it is not disputable for Telecommunications company Telekom Srbija JSC Beograd to be determined as an operator with significant market power on the retail market of publically available fixed line phone services, and thus being set with the obligation to offer these retail services under certain conditions. Having in mind the fact that the issue relates to the pre-regulation of market which is in an exclusive competence of the said regulatory authority, including the question whether and what sort of obligations will be imposed to operators with significant market power, along with potential alterations of those obligations, the Commission has presented its shared interest for obtaining positions of relevant institutions in regard to the presented issue.

The first group of requests for issuing opinions relates to the implementation of Article 10 of the Public Procurement Law (“Official Gazette of the RS”, no. 124/12) titled “Principle of ensuring competition”, envisaging that contracting authority may not limit competition, and in particular, it may not prevent any bidder from participating in public procurement by unjustified use of the negotiated procedure or by using discriminatory requirements, technical specifications or criteria. Such title and content of this article of the Public Procurement Law have indicated request applicants towards the Commission’s competence, and to that end, the Commission has received nearly 10 requests. These request applicants are further advised on the provisions of the Public Procurement Law in the case of infringement of the principle of ensuring competition by contracting authority, as well as on the Notice relating to requests submitted to the Commission to implement the principle of ensuring competition between bidders, issued on December 26, 2012 and published on the Internet page of the Commission. In the Notice concerned was pointed that: the Commission for Protection of Competition is not competent to implement provisions of the Public Procurement Law, thus to act pursuant to the complaints on infringement of the principle of ensuring competition in public procurement procedures; in the case of infringement of this principle, the party may submit a timely request for the protection of rights to the contracting authority, and then to the Republic Commission for the Protection of Rights in Public Procurement Procedures in accordance with the provisions of the Public Procurement Law, whereas the Commission has quoted position of the Republic Commission on the principle of ensuring competition from the Decision’s rationale (no. 4/0-01-359/2012 of September 19, 2012), indicating that contracting authority should not consider the number of collected bids as sufficient evidence of the existence of competition between bidders, but that is also necessary to fulfil the condition where all potential bidders would not be unjustifiably disabled in reaching their individual objectives of placing the most favorable bid, referring to the technical capacity requirement justifiable from the perspective of real needs of contracting authorities in terms of utilizing results of the implemented procurement. Contrary to the abovementioned, it is emphasized that the Commission for Protection of Competition is authorized for detecting, processing and penalizing cases of competition infringements – restrictive agreements from Article 10 of the Law on Protection of Competition, including inter alia, collusion of bidders on coordinated approach in public procurement procedures (so called rigged bids).

The Commission was requested to issue opinion on potential anticompetitive effects and related implications of the new legal solution governing institutes of “exhaustion of rights” and so-called “parallel imports”, introduced by the new Law on Trademarks (“Official Gazette of the RS”, nos. 104/2009 and 10/2013). The new legal solution introduced by the law reconfirms that a trademark does not entitle its holder to bar its use in connection with goods marked with such trademark and placed on the market in the Republic of Serbia for the first time by the holder of the trademark or other person authorized by the holder, but that trademark holder is entitled to prohibit other persons from illicitly placing goods in the market if procured abroad and imported into the Republic of Serbia for further sales (prohibition of parallel imports). The question has related to the possibility of created liability for potential anticompetitive conduct of trademark holder (for instance, in the form of abuse of dominance) by using authorizations to prohibit parallel imports toward protecting own rights as well as interests of consumers. The party has requested to receive a clarification on the “circumstances from the competition policy perspective that must be taken into consideration when planning and/or conducting acts and actions based on the trademark regulations, concerning the option of legitimate trademark holder to prevent parallel imports of goods (marked with its trademark) on the territory of the Republic of Serbia”.
The Commission has issued its opinion and emphasized the following: Regulations governing protection of intellectual property rights and protection of competition have a joint, ultimate objective, foremost related to the wellbeing, or respectively benefit of consumers. However, implementation of different methods in achieving this objective may represent a cause of concern for competition authority when observed from the competition policy perspective. Namely, protection of exclusive rights as stipulated by the intellectual property rights regulations, enables their owners or holders to acquire or strengthen their market power, which as a consequence may have the possibility that pursuant to such rights, including but not limiting, enter into restrictive contracts (licenses, franchising, knowledge management), strengthen dominant position and refuse trading. It should be noted that regulations governing competition policy are without prejudice to intellectual property rights regulations, but solely concern their implementation. The extension of exclusive rights in terms of enabling prohibition of parallel imports as described in the concrete case and pursuant to the Law on Trademarks, can truly have a significant influence on the state of competition and free movement of goods on markets, thus may restrict static competition (price competition occurring due to imitations) and advance dynamic competition, that is innovations. At first glance, it could be concluded that restrictions in implementing these rights could lead toward improved position of consumers because they may cause reduction of prices, but on the long run and as per position and practice of the EU, they might destimulate innovations thus ultimately causing damages for consumers. Implementation of both systems should be balanced so to function in the interest of consumers, because as we have previously stated, this interest represents a joint objective for regulations governing intellectual property rights as well as competition policy. Thus is necessary to establish effects on a case-by-case basis that might be achieved on the long or short run, i.e. set relevant criteria that would offset interests between competition policy regulations and intellectual property rights policies while observing the aforementioned context of achieving consumer benefits. In the majority of countries, regulations governing competition policy are frequently expressing reservations in terms of implementation of exclusive rights (as presented here in the case of trademark holder), which may be explained by the influence or adverse effects that rights given to the trademark holder and their respective implementation may have on the competition, by imposing restrictions on other undertakings-competing parties and creating possibilities deriving from such restrictions to impose price discrimination policies to the detriment of consumers. The regional system of exhaustion of rights as accepted in the EU, differs from the national in a sense that individual right holder is protected only in cases of parallel imports from non-EU member countries. The Commission will on an overall basis take into consideration principles and criteria incorporated in the EU regulations and practice and appropriately adjust them to our legal system. The European Justice Court already has a considerable practice in cases related to intellectual property rights and competition policy, originating from the 1966 Consten and Grundig case (in the context of prohibition of parallel imports and trademark rights) and followed by 1971 DeutscheGrammophon case, while in both cases the court has taken a stance that intellectual property rights are indisputable, but their usage may be the subject of prohibition and restrictions imposed by the European Commission if concerning infringements from Articles 81 and 82 of the EC Treaty – restrictive agreements and abuse of dominant position (currently Articles 101 and 102 of the Treaty on the Functioning of the European Union).

In the matter of implementation of competition policy regulations concerning the issue of limitation of market share size that an undertaking may hold, the simplest and fundamentally accurate reply would be: NO. What may be seen as an issue in terms of market share size, relates to the potential abuse of dominant market position and resulting infringement of competition, as defined in the competition policy regulations. In a similar manner, market share size may potentially be an “issue” in proceedings on the control of concentrations between undertakings, particularly if planned concentration is creating or strengthening dominant market position. This certainly does not mean that such concentrations would be necessary prohibited, but entails the “case-by-case approach” in inspecting and assessing individual cases. Also, in some cases concerning restrictive agreements, i.e. possibility of their exemption from prohibition, market share size may determine whether some undertaking(s) would enjoy the benefit of so-called “block exemption”, or would be obligated to submit requests for “individual exemption from prohibition”. By presenting the aforementioned, the Commission has only attempted to outline the complexity of the “market share size” issue, while depending on the type of case presented before the Commission, implemented approach to the issue may vary.

An investment fund from Luxembourg plans to become a new member in “Don Don” LLC pursuant to additional equity financing. In such manner, previous ownership structure of this domestic company would change from previous two-member to three-member structure, with new corresponding shareholders interest structure. Majority and minority shareholders interest in company “Don Don” prior to related transaction was 83.72% for “Don Don” from Slovenia, and 16.27% for company Realest from Slovenia. Following planned transaction, shareholders interest structure would alter by reducing previous shareholders interest to 62.80% and 12.19%, respectively, while the remaining share of 25.01% would be distributed to the new company member – Investment fund from Luxembourg. Article 17 of the Law in a precise and clearly defined manner outlines the occurrence of concentrations. In this connection, ownership or acquisition of share percentage by individual shareholders in observed entity is not of vital importance, but management rights created pursuant to the disposal of such shares. That further determines the control function of a shareholder over concrete company, which may be individual or joint. Assessment on the existence or non-existence of obligation to notify on concentration in this specific case is not determined by the fact that new member will have 25.01% of shares in the ownership structure of company “Don Don”, and accordingly have a proportional number of votes in the company’s assembly, but by the fact pertaining to the existence of individual veto rights in connection to the enactment of most important decisions concerning the functioning and operating activities of this company, as explicitly itemized in the request for issuing opinion. The Commission has established that principles governing the management and execution of control in the said company during the two-member shareholder structure are not defined in the request for issuing opinion. When issuing this opinion, the Commission has instituted from a fair assumption relating to the fact that previous majority shareholder holding 83.72% in share capital has been able to perform individual control in company “Don Don”. Following the entry into shareholders structure of observed company, Investment fund from Luxembourg would be able to jointly execute control in company “Don Don” pursuant to its obtained veto rights, since key decisions concerning business operating activities of this company could not be enacted without consent of the new shareholder. In such manner, previous – individual control in company “Don Don” would be transformed into joint control. Even under the assumption that minority shareholder has been able to take part in the execution of control during the two-member shareholder structure (which would indicate on the existence of previous joint control in this domestic company), implementation of transaction as previously described would indicate the change in the number of (joint) control executors in the said company, in consequence of which would also exist an obligation to submit notification for issuing compliance on the implementation of planned business transaction.

The change of control in domestic legal entity “Telenor Direct” LLC, created by acquisition of the remaining part of 51% of shares in the said company from its previous member and shareholder – company “Direct Group” LLC, on the part of company “Telenor” LLC as previous co-owner in this company with 49% of shares, is subject to the notification obligation (on concentration). The change of type of control as created in this specific case represents a concentration within the meaning of Article 17 of the Law. This derives from the fact that following implementation of the transaction concerned, joint control of members and co-owners in this company will be transformed into individual, or respectively individual control of company “Telenor” over company “Telenor Direct” LLC. The Commission’s presented position originates from the content of the Decision on amending the Memorandum of association of company “Telenor Direct”, enacted in accordance with the executed normative-legal adjustments of the MoA against the new Law on Business Companies of January 25, 2012. Article 8 of the MoA in a precise and clearly defined manner outlines authorizations, manner of election, functioning and manner of enacting decisions of the company’s Assembly, clearly pointing to the fact that the company’s Assembly is the managing and controlling body of “Telenor Direct” business operations, as well as that the case relates to the situation of jointly executed control by its members and co-owners over business operations of related company. Article 8, Item 3 of the aforementioned Decision, gives precise information on the total number of votes in the Assembly (100), as well as the right of each company member to “have the number of votes in proportion to its share in the company’s equity” (“Telenor” LLC with 49%, while “Direct Group” LLC has 51%). Identical article in Item 12 regulates the manner of enacting decisions, stating that “Assembly will enact all decisions by qualified majority of 66 votes”. By implementing the case-related transaction, change in the form of control from joint into individual is created, which in combination with concurrent fulfilment of financial conditions prescribed in Article 61 of the Law on Protection of Competition, points to the case of concentration subject to the notification obligation, meaning that concentration concerned requires obtaining the Commission’s approval.

The Law on Protection of Competition has established the obligation of undertakings to notify on concentrations in a manner and under conditions prescribed by the law and Regulation on the content and manner of submitting notification on concentration (“Official Gazette of the RS”, no. 89/09). Also, legislator has determined that participants in concentration shall be required to interrupt the implementation of concentration pending enactment of the Commission’s decision, as well as competence of competition authority that in the case of conducting concentration contrary to these obligations, determine the measure for protection of competition in the form of commitment payment in the amount up to 10% of the total annual revenue. The Commission has presented its position and opinion in the form of the Notice which was published on the website, with an intent to send a clear message to all undertakings that nonobservance of obligations relating to the notification on concentrations and interruption of implementation of concentrations pending enactment of the Commission’s decisions, represent a serious violation of the Law, and that the Commission shall determine measures for the protection of competition in cases of established infringements. On June 10, 2009, the European Commission has enacted a decision determining penalty measure in the amount of 20 million euro to Belgium company Electrabel S.A., one of the largest European energy operating company for acquiring control over Compagnie National du Rhône SA (CNR) from France, implemented without enacted decision of approval by the EC, or respectively due to the nonobservance of the “inactivity” obligation in relation to the concentration’s implementation pending enactment of the EC decision. It is important to mention that company Electrabel has submitted a notification on concentration in 2008 that was approved by the EC, but the authority has retained the right to set actual date for the acquisition of control. In the decision from June 2009, it is established that company Electrabel S.A. has de facto acquired individual control over the French company on December 23, 2003, without acquiring prior approval of the EC. The penalty measure, i.e. the EC decision is reconfirmed by the Basic Court (previously the Court of First Instance) by enacting adjudication decision during December 2012, dismissing the appeal of company Electrabel. Prior to this case, the European Commission has only in several instances enacted decisions on penalty measures for the nonobservance of obligations to submit notification on concertation and on the infringement of obligation to suspend the implementation of concentration, but the considerable penalty measure in this concrete case has been set using the criteria such as the size of company, duration of the infringement and existence of the Commission’s decision-making practice. The EC position in this case was that related infringement must be considered as serious, nonetheless provided assessment of related concentration, bearing in mind that by its nature the infringement at issue has breached the most basic principle of the Community system of merger control, which is ex ante control. The reasoning for presenting this regulation of the European Commission, probably already well-known to individual undertakings, can be found in the need to point to the fact that the observance of legally prescribed obligations is not just a formality for the parties to the concentration, or acquirer(s) of control. On the contrary, it relates to the obligation that foremost needs to be observed in the context of plausible adverse effects that concentrations previously not approved by the Commission may inflict on the state of competition, as well as on the importance that ex ante controls of concentrations hold in securing the protection from restriction, distortion or prevention of competition, or respectively in creating or strengthening dominant position of undertakings on the relevant market.