A new law on the protection of competition (Official Gazette 44/2012) came into force on October 9 2012. The Competition Act regulates both market behaviour (restrictive agreements and abuse of dominance) and merger control.
With respect to merger control, the most significant changes concern notification thresholds and deadlines, as well as deadlines within which the competition authority must review mergers and issue appropriate decisions.
Agency for the Protection of Competition
Although formally a new body established by the Competition Act in the form of a public agency, the Agency for the Protection of Competition is the successor of the Directorate for the Protection of Competition established in 2008. The agency is responsible for competition law but has recourse to misdemeanour courts in order to levy fines for competition law violations. Decisions rendered by the agency can be challenged before the Administrative Court.
A concentration must be notified to the agency if either of the following thresholds is met:
- the aggregate local annual turnover of at least two parties to the concentration exceeds €5 million; or
- the aggregate worldwide annual turnover of the parties to the concentration exceeds €20 million, provided that at least one of the parties achieved a turnover of €1 million within Montenegro in the same year.
However, the agency can order participants to a concentration to notify if their joint market share in a relevant market in Montenegro is at least 60%. The burden of proof lies with the agency.
A concentration must be notified within 15 days following:
- the conclusion of an agreement;
- announcement of a public bid, offer or closing of the public offer; or
- the acquisition of control (whichever occurs first).
However, the parties may notify a transaction to the agency before one of the above-mentioned events if they demonstrate their serious intent to enter into an agreement (eg, by signing a letter of intent, publicising their intent to make an offer or in any other way which precedes any of the triggering events mentioned).
On submission of a complete notification, the agency must render a decision approving the concentration unconditionally within 105 working days, or a decision approving the concentration subject to conditions within 125 working days. If the concentration creates or strengthens a dominant market position and consequently prevents, restricts or distorts competition, the agency shall prohibit the concentration within 130 working days.
If the agency does render a decision within the above-mentioned deadlines, the transaction is deemed to be cleared. However, it is unclear after which of the aforementioned deadlines has passed may a transaction be presumed cleared (eg, the shortest 105 or longest 130-working day deadline).
Currently, there is no information available concerning filing and/or clearance fees. However, pursuant to the Competition Act and with government approval, the agency is due to publish the respective tariff.
The Competition Act prescribes fines in the event that parties to a transaction fail to file a merger notification within the 15-day deadline. In such cases, the parties to the concentration may be subject to fines ranging from €4,000 to €40,000. The persons in charge within the undertaking in breach may be fined between €1,000 and €4,000.
If an undertaking carries out a concentration without prior clearance from the agency (in violation of the suspension obligation) or carries out a prohibited concentration, it may be fined between 1% and 10% of its total annual turnover in the financial year preceding the violation. The persons in charge within the undertaking in breach may be fined between €1,000 and €4,000.
For further information on this topic please contact Srdjana Petronijevic at Moravcevic Vojnovic i Partneri in cooperation with Schoenherr by telephone (+381 11 320 26 00), fax (+381 11 320 26 10) or email (firstname.lastname@example.org).
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