Serbia: from the enforcer
President of the Commission
Tel: +381 11 3811 911
Email: [email protected]
Questions and answers
How long is the head of agency’s term of office?
In accordance with article 24 of the Law on Protection of Competition, “Official Gazette of the RS”, No. 51/2009 and 95/2013 (the Law), the term is five years.
When is he or she due for reappointment?
He is due for reappointment in 2024.
Which posts within the organisation are political appointments?
What is the agency’s annual budget?
The financing of operations of the Commission for Protection of Competition (CPC) is performed in accordance with the financial plan enacted by the CPC for each year and submitted to the government for approval no later than 1 November of the current year for the subsequent year (article 32 of the Law). The financial plan contains, inter alia, planned revenues and expenditures of the Commission.
The funds for the CPC’s operations, as stipulated in article 31 of the Law, are secured from revenues that CPC generates from its activities, particularly from:
- fees payable in accordance with the Law;
- donations, except from donations made by undertakings to whom the Law applies;
- revenues from the sale of the CPC’s publications; and
- other sources in accordance with the law.
In 2018, the budget of the CPC, stemming from its revenues (before expenses and contingency reserve) amounted to around €4 million, in 2019 around €4.4 million and in 2020 around €3.3 million. The corresponding data is available on the CPC’s website, in the section Annual Reports.
How many staff are employed by the agency?
There are 51 persons employed in the Professional Service of the Commission. In addition to the Professional Service of the Commission, there are five members of the decision-making bodies of the Commission (the President and the four members of Council of the CPC; the President is also a member of the Council, which means that the CPC Council has five members), who are appointed by the National Assembly of the Republic of Serbia for a five-year term.
To whom does the head of the agency report?
To the National Assembly of the Republic of Serbia.
In line with article 20, paragraph 3 of the Law, the CPC is accountable for its work to the National Assembly, to which it submits an annual work report by the end of February of the current year for the preceding year.
Do any industry-specific regulators have competition powers?
The CPC is entitled to enforce competition rules in all sectors of the economy. The CPC cooperates closely with industry-specific regulators, such as the Energy Agency of the Republic of Serbia, the National Bank of Serbia, the Regulatory Agency for Electronic Communications and Postal Services, and so on. To this end, the CPC has entered into memoranda of cooperation with the aforementioned and other bodies.
If so, how do these relate to your role?
May politicians overrule or disregard authority’s decisions? If they have ever exercised this right, describe the most recent example.
No, politicians may not overrule or disregard decisions of the CPC. This is in line with the status of the CPC as an independent and autonomous organisation performing public competencies in accordance with article 20 of the Law.
Does the law allow non-competition aims to be considered when taking decisions?
Which body hears appeals against the agency’s decisions? Is there any form of judicial review beyond that mentioned above? If so, which body conducts this? Has any competition decision by the agency been overturned?
Decisions of the CPC are final and not subject to appeal; however, they are subject to judicial review. Namely, against the final decisions of the Commission, a claim may be brought before the Administrative Court.
In case of extraordinary legal remedies, such as a request for review of court decision, the Supreme Court of Cassation may revoke the Administrative Court decision.
Has the authority ever blocked a proposed merger? If yes, please provide the most recent instances.
So far, the CPC has blocked two mergers, one in the retail sector (2006) and the other in the sugar industry (2012).
Has the authority ever imposed conditions on a proposed merger? If yes, please provide the most recent instances.
Yes. For example, in March 2021, the CPC conditionally approved a concentration by way of which the company Kingspan Holding Netherlands would acquire individual control over the company Trimo, arhitekturne rešitve, d.o.o., and its subsidiary companies, by way of purchase of shares. The purpose of conditions (ie, commitments relating to the future behaviour) is to ensure the continuity or maintenance of production of mineral fibre sandwich panels in the manufacturing facilities in Serbia of companies Trimo Srbija and TeraSteel Srbija and legal autonomy of said companies. For example, these include the necessity of abstaining from making changes to the business name of companies Trimo Srbija and/or TeraSteel Srbija, the preservation of (separate) businesses and existing brands on the relevant market of companies Trimo Srbija and TeraSteel Srbija, the prevention of the exchange of confidential business information and/or business sensitive information in direct contact between companies Trimo Srbija and TeraSteel Srbija, as well as the filing of annual reports to the Commission on the degree of manufacturing capacity utilisation of companies Trimo Srbija and TeraSteel Srbija.
This decision is not yet published, but all the other decisions of the CPC on conditional approval of concentrations are published on its website.
Example from previous year: in October 2019, the CPC conditionally approved a concentration by way of which the company Roaming Electronics would acquire individual control over the following three companies: WINWIN SHOP d.o.o., Emmi House d.o.o. and WINWIN RETAIL d.o.o. The conditions were related to divestiture of the relevant parts of business of Roaming Electronics within six months of the effective date, as specified in the decision of the CPC (http://www.kzk.gov.rs/kzk/wp-content/uploads/2020/02/2019-600-Decision-on-merger-approval-subject-to-conditions.pdf).
Has the authority conducted a Phase II investigation in any of its merger filings? If yes, please provide the most recent.
Yes, the CPC has conducted ex officio investigation procedeeings in several cases of merger filings.
The most recent examples from 2021 are those involving company Kingspan Holding Netherlands. In the first mentioned case, the Commission opened investigation proceedings in order to assess whether the notified acquisition of individual control by the company Kingspan Holding Netherlands over companies TeraSteel SA Romaina, TeraSteel d.o.o Leskovac, TeraSteel Slovakia SRO, Wetterbest SA, Romania, and its subsidiary Cortina WTB SRL, Romania, would significantly restrict, prevent or distort competition on the markets for production and sales of sandwich panels in Serbia. Namely, through examination of all the data submitted with the notification and subsequent additions, the CPC established that concentration would cause significant overlapping between the merging parties on the market for production and sale of foam sandwich panels in Serbia, with significant market shares. Upon ex officio investigation, the CPC found no reason for concern, as it established that the concentration will not cause negative effects on the defined relevant markets, and approved the concentration.
In the second case, involving acquisition of individual control by the company Kingspan Holding Netherlands over the company Trimo, arhitekturne rešitve, d.o.o., and its subsidiary companies, as mentioned before, the CPC opened investigation proceedings in order to assess whether the notified acquisition would significantly restrict, prevent or distort competition on the markets for production and sales of sandwich panels in Serbia. During the investigation proceedings, the CPC found that the case concerns a horizontal concentration in which a dominant position by the Kingspan Holding Netherlands would be created on the market for production and sales of mineral fibre sandwich panels, with a market share of 60 to 70 per cent, and which could lead to restriction, distortion or prevention of competition on the market concerned. The market share of the first competitor is 10 to 20 per cent, while other undertakings have a market share of zero to 5 per cent each. When the CPC issued the statement of objections to the acquirer, the latter proposed to undertake commitments within deadlines stipulated in the proposal, which the CPC examined and accepted. Thus, the acquisition was approved, but with conditions for the acquirer, described above.
Has the authority ever pursued a company based outside your jurisdiction for a cartel offence? If yes, please provide the most recent instances.
Do you operate a leniency programme? Whom should potential applicants contact? What discounts are available to companies that cooperate with cartel investigations?
The Law on Protection of Competition, in force from 1 November 2009 (and its amendments from 2013), contains provisions on the leniency programme. Furthermore, potential applicants for leniency can find all the relevant facts concerning the programme in the Regulation on the Conditions for Relief from the Commitment of Payment of the Monetary Amount of the Measure for Protection of Competition (Leniency Regulation) and Guidelines on Application of article 69 of the Law on Protection of Competition and Leniency Regulation. The CPC has a special email address and phone number for contact with leniency applicants and the receipt of notifications.
As regards the leniency programme, according to article 69 of the Law, a restrictive agreement participant may be relieved from the obligation to pay the monetary amount of measure for protection of competition under the conditions prescribed therein. For a restrictive agreement participant who fails to fulfil the conditions for relief, the monetary amount of the measure of protection of competition may be reduced, in accordance with the same article of the Law.
The Guidelines on Application of article 69 of the Law on Protection of Competition and the Leniency Regulation (published on the CPC’s website) further define the corresponding amount of reduction:
- from 30 to 50 per cent for the first applicant;
- from 20 to 30 per cent for the second applicant; and
- up to 20 per cent for every subsequent applicant.
Is there a criminal enforcement track? If so, who is responsible for it? Does the authority conduct criminal investigations and prosecutions for cartel activity? If not, is there another authority in the country that does?
Criminal cases are conducted by the criminal court, which keeps its own record. The Public Prosecutor conducts criminal investigations and prosecutions for cartel activity, governed by the rules on criminal procedure, the Criminal Code and Law on the Liability of Legal Entities for Criminal Offences.
On the other hand, the CPC conducts investigations of competition infringements, including cartel activity, in administrative proceedings, pursuant to the Law on Protection of Competition, and is entrusted with the power to impose measures to an undertaking or their associations in infringement proceedings of which it keeps a record.
Are there any plans to reform the competition law?
This question is within the competence of the Ministry of Trade, Tourism and Telecommunications as the Serbian government is the official proposer of the Law.
When did the last review of the law occur?
The law was last amended in October 2013, and the amendments became effective on 8 November 2013.
Do you have a separate economics team? If so please give details.
Yes. The Economic Analyses Division of the CPC is in charge of conducting sector inquiries, market research of economic indicators and other market analysis, as well as involved in investigation of cases of competition infringements and concentrations.
Has the authority conducted a dawn raid?
Yes. The CPC has conducted many dawn raids. In 2020, the CPC conducted 18 dawn raids in five cases. Most recently, in the period from January to October 2021, the Commission has conducted eight dawn raids and one inspection in four cases.
In line with international best practice, during the investigations, the CPC officials use IT forensic tools to acquire the relevant electronic data. Also, many of the CPC case handlers have now been trained to carry out dawn raids and use forensic tools, even though this is a rapidly evolving field (technology, sort of data to be analysed, etc).
Has the authority imposed penalties on officers or directors of companies for offences committed by the company? If yes, please provide the most recent instances.
No, the CPC has no such competency. According to the Law on Protection of Competition, the CPC can impose administrative measures, namely, measures for protection of competition and procedural penalties on market participants (natural or legal persons as defined in the Law, but not officers or directors within a legal entity).
The criminal court has the competence to impose penalties for offences on individuals, pursuant to provisions of the Criminal Code.
What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger?
A concentration must be notified to the CPC if:
- the aggregate annual worldwide turnover of all parties to the concentration in the preceding financial year is above €100 million, whereby at least one party’s turnover realised on the market of the Republic of Serbia exceeds €10 million;
- the aggregate annual turnover of at least two parties to the concentration realised on the market of the Republic of Serbia is above €20 million in the preceding financial year, whereby at least two parties’ annual turnover realised on the market of the Republic of Serbia exceeds €1 million each, in the same period.
Are there any restrictions on minority investments that involve less than a majority stake in the business?
There are no such restrictions in the Law on Protection of Competition.
Serbia: from the enforcer's competition economists
Head of Economic
Tel: +381 11 3811 944
Email: [email protected]
Questions and answers
How many economists do you employ?
Among the case-handling staff, there are 10 economists.
Do you have a separate economics unit?
Yes, the Economic Analyses Division.
Do you have a chief economist?
In our organisation structure, there is no chief economist per se, but the Head of the Economic Analyses Division has the role of the chief economist.
To whom does the chief economist report?
The Head of the Economic Analyses Division reports to the President of the Commission.
Does the chief economist have the power to hire his or her own staff?
Only the President of the Commission has the power to hire staff, but the Head of the Economic Analyses Division usually provides recommendations.
How many of your economists have a PhD in industrial economics?
In the case-handling team, there is one economist who holds a PhD.
Does the agency include a specialist economist on every case team? If not, why not?
Is the economics unit a ‘second pair of eyes’ during cases – is it one of the agency’s checks and balances? If not, why not?
The Head of the Economic Analyses Division performs a checks and balances function during the handling of cases. Other staff members from the Economic Analyses Division are included in cases as case handlers.
How much economics work is outsourced? What type of work is outsourced?
The Commission usually does not use outsource economics work as the economists from different Divisions of the CPC provide economic analyses, both for the purposes of case-handling and performing sector inquiries. Nonetheless, the Commission occasionally outsources economics work with regard to sector inquiries, depending on the level of engagement of its staff and the expertise sought in a particular field.
So far, the Commission has outsourced only three sector inquiries. The first time was in 2016, when the Commission outsourced a sector inquiry into the aftermarkets (ie, markets of aftersales services, guarantees, turnover and use of spare parts for motor vehicles and top selling home appliances – refrigerators and washing machines). In that case, the research was conducted by the Serbian Institute of Economic Sciences, under the auspices of a project conducted in cooperation with the Public Policy Secretariat of the Republic of Serbia and with the financial and technical support of the Swiss Agency for Development and Cooperation (PERFORM Project). In 2020, the Commission completed a sector inquiry into the rail freight transport market of the Republic of Serbia (for the period 2017–2019) in cooperation with the World Bank, within the framework of the Serbia Investment Climate Program. The delivery of one more sector inquiry, under the same programme is expected in the forthcoming period. This is the sector inquiry into the intercity bus transportation market for the years 2017–2019, which is ongoing.