In 2020 and 2021 there were no developments towards the adoption of the new law and bylaws regarding competition/antirust (a process that started in 2017), probably due to the coronavirus pandemic. Certain changes in respect to the enforcement of competition rules were introduced during 2020, due to COVID-19, such as a new manner of communicating with the Serbian Competition Commission, a prolongation of the deadlines during the state of emergency in Serbia, etc. However, all subject changes have been put out of force and are being restored to the state prior to COVID-19.
Pursuant to publicly available data on the commission’s official website (since the commission’s annual report has not been published), during 2020 the commission was very active in competition rules enforcement since it initiated nine new investigations, with a special emphasis on resale price maintenance, as it initiated six new resale price maintenance investigations. The trend of initiating investigations after conducted sector inquiries and analysis of specific conditions on the relevant markets has continued in 2020. The commission also initiated one investigation for gun-jumping, i.e. the implementation of a concentration without the clearance of the commission. It also rendered decisions and imposed fines in four restrictive agreements proceedings, as well as one fine for abuse of dominant position.
In 2020, the commission rendered 106 merger clearance decisions, whereas 103 were cleared by the commission in summary proceedings, one merger was cleared after investigation proceedings, whilst for three mergers the commission initiated investigation proceedings.
From the beginning of 2021 until now, the commission has issued 63 merger clearance decisions, while it did not initiate procedures or render decisions regarding the existence of restrictive agreements or abuse of dominant position. The commission has continued the trend of conducting sector inquiries and released the following two reports: (1) Report on the Sector Inquiry into Competitive Conditions on the Tour Operators Market for 2017-2019 and (2) Report on Sugar Beet Production and Buy Out, Sugar Production and Wholesale Trade for 2017-2019.
The commission has also suspended proceedings against a seller whose standard form agreements were potentially considered restrictive agreements, due to resale price maintenance, pursuant to a submitted proposal for undertaking voluntary commitments to remove potential infringements of competition law, which were accepted by the commission. In the same investigation, the commission terminated the proceedings against small retailers with the rationale that they did not have the bargaining power to amend the contractual provisions due to their size, market, and financial strength, taking a step forward towards alignment of its practice with EU case law.
We could notice that during 2021 the commission focused on gun-jumping investigations and independent monitoring of media and public registries. It initiated two procedures for gun-jumping and imposed one fine, in relation to the proceedings initiated in 2019. As for the latter, the commission imposed a fine in the amount of approximately EUR 75,000, which is only the second decision imposing a fine for gun-jumping (the first was imposed in 2017 in the amount of approximately EUR 56,000). It remains to be seen what the fining practice for gun-jumping will be in the future (since the two imposed fines were low compared to the potential fine of 10% of Serbian turnover in the preceding year) and whether the commission shall enact any decisions imposing measures of ‘deconcentration’ by ordering undertakings to divide a company, dispose of stakes or shares, terminate a contract, or perform other actions in order to re-establish the conditions prior to the concentration.
We could also notice that, during the last year and a half, the number of notified concentrations dropped significantly due to a general decline in economic activity caused by the COVID-19 pandemic. It remains to be seen what long-term impact the pandemic will have on competition in Serbia, especially in respect of its enforcement by the commission.
By Nikola Poznanovic, Partner, and Bojana Javoric, Senior Associate, JPM Jankovic Popovic Mitic