On April 18 2012 the Competition Council of Bosnia and Herzegovina found that agreements concluded between the Ministry of Education, Science and Youth of the Canton of Sarajevo and the municipalities of Vogosca, Ilijas, Ilidza, Novo Sarajevo, Stari Grad, Novi Grad, Trnovo and Hadzici, relating to subsidised student transport services, were in breach of competition rules. The council ruled that certain provisions of the agreements were null and void and imposed a fine on the ministry.
The procedure was initiated at the request of Centrotrans Eurolines, a company that provides national and international passenger transport services. Centrotrans argued that the ministry, which is obliged by law to provide subsidies for the transport of students to and from schools within its territory, had breached competition rules as it had concluded the agreements without regard to public procurement rules and thereby favoured Gras, a public transportation service provider operating in the municipalities.
The council defined the relevant market as the market for the provision of subsidised transport for students in the Canton of Sarajevo. After examining the facts, it found that the agreements restricted competition, as they expressly stipulated that the service should be provided by Gras. Furthermore, the council found that the municipalities, by concluding the agreements, were prevented from calling bids for the provision of such services, which in return excluded the possibility of any other providers of passenger transport services competing for them.
In its decision, the council:
- found that the agreements restricted competition and foreclosed the relevant market;
- held certain provisions of the agreements to be null and void; and
- imposed a fine of €13,000 on the Canton of Sarajevo.
When determining the fine, the council reasoned that the aim of the fine was not to punish, but rather to warn the ministry of its anti-competitive behaviour. It also stated that it considered the intent of the ministry to restrict competition, the duration and gravity of the infringement, and the fact that the ministry had reformulated some of the restrictive provisions when concluding new contracts for 2012, which to a certain extent mitigated the negative effects on competition.
For further information on this topic please contact Srdjana Petronijević or Danijel Stevanović at Moravčević Vojnović i Partneri in cooperation with Schoenherr by telephone (+381 11 320 26 00), fax (+381 11 320 26 10) or email ([email protected] or [email protected]).