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Editorial

Serbian competition authority publishes its annual report for 2012

The Serbian Commission for Protection of Competition has published its Annual Report for 2012. Because the Commission publishes its decisions and opinions randomly, the report offers an informative scan of the authority’s activities in the course of the previous year.

Commitment decisions

The Commission has rendered three decisions on suspension of proceedings under Article 58 of the Law on Protection of Competition following the commitments offered by the investigated undertakings. The cases concern: alleged abuse of dominance by a public enterprise for maintenance of residential and business premises; alleged fixing of minimum prices of certain engineering services by the Serbian Chamber of Engineers; and an allegedly restrictive horizontal agreement entered into by three insurance companies in the context of a joint bid in a public procurement procedure, respectively. The Commission agreed to suspend the proceedings in these cases because the companies under investigations had ceased the challenged practices and the Commission found that breaches of competition were not significant. In all three cases the proceedings were suspended for a period of six months, the longest suspension possible under the current legislation.

Infringement decisions

In 2012, the Commission issued 12 decisions on infringements – seven concerned abuse of dominance while five pertained to restrictive agreements.

In the abuse of dominance arena, the report summarizes the Commission’s findings of abuse on the wholesale market of industrial ice-cream by Frikom, abuse on the market of purchase of raw milk by Imlek and Subotička mlekara, and abuse on the market of cross-border money transfers by Eki Transfers. The latter two decisions were rendered in repeated proceedings, on the heels of the quashing of the Commission’s initial decisions by the Administrative Court. In the new proceedings, the Commission again established that the undertakings had abused their respective dominant positions. Imlek and Subotička mlekara escaped fines due to the expiry of the statute of limitations. In Eki Transfers, the Commission imposed fine even though the infringement itself had been determined in the proceedings conducted under the old Law on Protection of Competition of 2005 when the Commission did not have the power to issue fines.

The Report describes two decisions on restrictive agreements (Idea-Grand Prom and Idea-Swisslion), both concerning resale price maintenance. The decisions were delivered after the Administrative Court remanded the respective cases to the Commission following successful judicial challenges. In the repeated proceedings, the Commission re-established infringements. In Idea-Grand Prom case, the Commission followed the instruction of the Administrative Court and fined Grand Prom only, while acknowledging the immunity of Idea as a result of a leniency application. In Idea-Swisslion case, the Commission afforded leniency to both parties to the restrictive agreement (in the initial decision, the Commission fined Idea with EUR 4.4 million).

Individual exemptions

According to the 2012 Annual Report, the Commission granted 13 requests for individual exemption from the prohibition of restrictive agreements. Two of the exempted agreements were consortium agreements for the purpose of joint participation in public procurement procedures, while 11 exemptions pertained to distribution agreements. In one reported case, the Commission found that the agreement sought to be exempted was in fact not restrictive.

Concentrations

Statistics provided in the report suggest that the turnover thresholds for mandatory concentration filing under the Serbian law are too low and catch a significant number of transactions which do not raise any competition concern on the Serbian market.

In 2012, the Commission issued 105 decisions in merger control proceedings. Majority of filings pertained to acquisitions taking place outside Serbia. The Commission reached decisions on the merits in 97 cases. In 94 of those cases, the Commission cleared mergers in summary proceedings. In three cases, the Commission approved concentrations conditionally. In Štampa Sistem– Futura Plus in bankruptcy, the Commission accepted behavioral measure proposed by the applicant (not to increase points of sale in seven municipalities). In Centrosinergija – Lanus, the acquisition was conditioned by both a structural measure (divestment of a part of the business) and the measures of behavioral nature (concerning rebate policy towards customers and conclusion of sub-distribution agreements for sale of top-ups for mobile phones). In Sunoko (proposed takeover of Hellenic Sugar by Serbian Sunoko), the Commission initially prohibited and subsequently conditionally approved the proposed concentration.

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