The new Serbian Competition Law was enacted in 2009. Like its predecessor, the new law promotes rules for fair and effective competition based on general EU rules. In line with similar legislation in EU member states, the Competition Law covers three main areas of potential competition concerns: agreements, abuse of dominance and merger control. The enforcement of the law is entrusted to the Competition Commission (CC), which was originally created under the old law in 2006. Following the expiry of the term of office of most members, in October 2010 the parliament elected new members of the CC. General competition law rules are derived from articles 101 and 102 of the Treaty of Lisbon. The main merger control principles are derived from the European Commission’s (EC) Merger Regulation (ECMR).

The new law brings significant changes to the Serbian competition landscape mainly by widening the scope of the CC’s competence. It has provided the CC with the ability to perform dawn raids and to directly impose fines and other sanctions. The leniency regime has been considerably amended, and has been essentially drafted in the spirit of the EC Leniency Notice. In the summer of 2010 the government and the CC adopted a pair of secondary regulations detailing the sanctioning guidelines. This closed the gap on the final (practical) obstacle to the CC’s imposing sanctions; and after the first prohibition decision had been upheld by the court, the CC imposed the first fine ever for a Competition Law infringement in the amount of approximately €3 million.

The increase of merger control thresholds should be credited for the CC’s focusing on more traditional antitrust matters. Most notably, the CC has opened and closed the case against the largest dairy conglomerate in Serbia (Danube Foods Group), the very one against which the €3 million fine was levied in January 2011, in a case involving abuse of dominance. This has also become the first case in which the Administrative Court upheld the CC’s decision. The case generated much media attention in the autumn of 2010 and at one stage even the public prosecutor announced the opening of a pre-trial criminal investigation against the company and its directors, the reason being that the Serbian Criminal Code criminalises the abuse of dominant position (monopoly, as it refers to it).

Serbian Competition Commission
The CC is composed of five members (decision-makers, one of whom is the president - the head of the CC) who are appointed by parliament. It also has an expert service consisting of a number of professional case-handlers. The CC is an independent regulatory body. It is based in Belgrade and is answerable to parliament.

Sanctions for competition infringements
In accordance with the previous law, the misdemeanour courts were responsible for the levying of fines. As a result of this, fines were rarely levied in Serbia. In contrast, under the new law, the CC is now authorised to directly fine undertakings responsible for competition infringements. The largest fines are reserved for undertakings that engage in prohibited agreements or concerted practices, the abuse of a dominant position or that implement a concentration without approval.

The fines for competition infringements are the highest available in the Serbian legal system, and can be as severe as 10 per cent of an undertaking’s annual worldwide turnover as realised in the previous financial year. The CC can issue procedural penalties for nonconformity as well as behavioural and structural measures. These can include the sale of an infringing undertaking’s assets. In addition, in relation to merger control, a divestment measure may be issued ordering that a prohibited concentration be broken up.

Furthermore, the Serbian Criminal Code provides for the possibility of imprisonment where a person has committed a competition infringement by virtue of their concluding a restrictive agreement or due to the abuse of dominance.

The Serbian competition law factsheet

• The new Competition Law came into effect on 1 November 2009.
• The Competition Commission can levy fines directly like most of its counterparts in EU jurisdictions.
• Competition law is generally harmonised with EU competition law. The main concepts are either transcribed, or based on EU competition law.
• Maximum fines can be up to 10 per cent of an undertaking’s worldwide annual turnover (minimum fines can be from 6.67 per cent of the undertaking’s turnover with the relevant product(s)); this can result in the imprisonment of individuals for the most severe violations.
• Rules on prohibited agreements and dominant positions are taken from articles 101 and 102 of the Treaty of Lisbon.
• Parties to restrictive agreements must seek an individual exemption as neither block exemption regulations nor formal guidelines on self-assessment have been enacted.
• High fees for the issuance of clearances exist. The fee for the issuance of merger clearance in summary proceedings is approximately €19,000 and with inquiry proceedings the fee is €38,000.

Karanović & Nikolić