Recent studies and announcements indicate that the Commission is assuming sector-specific approach.

In November 2016, the Commission published an external study on the aftermarkets in the automotive sector, and confirmed that drafting of Motor Vehicle Block Exemption Regulation is on its agenda. We blogged about this here.

On 25 December 2016, the Commission published a report on the Serbian insurance market, and announced its plan to draft an Insurance Block Exemption Regulation ("IBER"). Except where the specifics of the Serbian insurance market require otherwise, the regulation will be harmonized with the EU Block Exemption Regulation for the Insurance Sector. This means it will apply to joint studies of insurance companies, and co-insurance pools. IBER is particularly welcome in light of high number of individual exemptions sought from the Commission for co-insurance agreements. IBER will allow parties to perform self-assessment rather than having to rush to the Commission for individual exemption (unlike the EU, in Serbia restrictive agreements not benefiting from a safe-harbour of a block exemption regulation must obtain a prior individual exemption from the Commission).

If the Commission stays true to its promises expressed in the 2015 Annual Report, it is expected to draft a block exemption regulation applicable to transfer of technology, as well as a regulation on road, rail and inland waterway transport.

The Commission announced sector inquiry into retail market, particularly focusing on distributorship, retail and procurement arrangements in non-specialized stores which sell foods, beverages and tobacco.

Electricity network operator fined EUR 2.6 million for abuse of dominance

Shortly before Christmas, the Commission rendered its only abuse of dominance decision in 2016, sanctioning domestic electricity distribution network operator EPS Distribucija with a record high EUR 2.6 million fine.

Elektroprivreda Srbija (EPS), a state-run electricity generation, distribution, and supply company, was recently unbundled into separate entities for distribution (EPS Distribucija) and supply (EPS Snabdevanje) functions, to meet the EU internal energy market requirements in light of Serbia's EU candidacy. Since 2015, the electricity market in Serbia has been fully liberalized, although the Commission's decision speaks of shortcomings in the unbundling process which restrain competition on the market.

To specify, EPS Distribucija, a monopolist operating the electricity distribution network, has been commercially favouring its affiliate EPS Snabdevanje against other electricity suppliers, and, on top of that, discriminated between different suppliers with regard to bank guarantee requirements. The Commission also noted the non-transparent nature of EPS Distribucija's operations, such as a failure to openly publish its model supply agreement and bank guarantee policies.

Though the fine is in absolute terms unprecedented in Serbia, percentagewise the fine imposed for what the Commission characterized as a "very serious" competition breach is at the lower-end of the range, having been significantly diminished to 0.6% of the infringer's annual turnover (the maximum fine is capped at 10% of a company's annual turnover) due to active cooperation from EPS Distribucija.

Early in 2016, the Commission dealt with a similar situation albeit in the railroad sector. Publicly-owned Serbian Railways, a monopolist operating the railway infrastructure and providing passenger and cargo railway services, underwent a similar unbundling process for rail transport liberalization purposes, but was refusing to grant railway access to other transportation companies. The Commission suspended the proceedings against the offered commitments.

Sporting retailer fined EUR 14,000 for a failure to co-operate

While co-operation with the Commission provides fruitful benefits in the form of considerable fine deductions, non-cooperation is mercilessly punished. We have already written about the dawn raids the Commission conducted on the premises of sport equipment retailers, suspecting engagement in resale price maintenance practices. The Commission subsequently requested additional data from the companies involved. One of the retailers, Sportiko, was unavailable on its registered address, and failed to respond to the Commission's request which was published on the authority's website. Consequently, just before the New Year, the Commission fined it with a EUR 14,000 penalty, EUR 500 per every day of violation. Again, the penalty is comparatively low, given that procedural penalties may amount to up to EUR 5,000 per each day of breach, and are capped at 10% of the company's annual turnover.

No mercy for bid-rigging cartels

As an early New Year's gift, in December the Commission rendered a decision against two transportation companies, Bora Kečić, and Large Transport. The two companies were bidders in a public tender with six lots. Large Transport offered the lowest prices in all of the lots and won the tender, but subsequently withdrew from several lots, so that Bora Kečić, who was ranked 2nd and offered a higher price, could win the procurement. The Commission found Large Transport's withdrawal commercially irrational, unless the companies had pre-arranged bidding prices and acted in a consortium. As the icing on the cake, the directors of the companies were related by corporate and familial ties, and both companies factually worked in the same premises, communicated via same fax and phone numbers, and had the same authorized person sign the correspondence from the Commission. The companies were fined 2.42% of their annual turnover each.

This is the one of the two infringement decisions rendered in 2016, the other being a resale price maintenance case. Under the Serbian competition rules, competing companies are allowed to jointly participate in public procurement procedures, if they fulfil the conditions of the Commission's Opinion on consortium bidding in public tenders, or else they must beforehand obtain an individual exemption from the Commission. Undisclosed cooperation of competitors in tender procedures is a hard-core violation of competition rules, and a criminal offense punishable with up to ten years of imprisonment.

SBB/IKOM merger in Phase II review

2016 has been an active year in the area of merger control, starting with a new Merger Decree, which allowed for "short-form" notifications for concentrations unlikely to trigger appreciable competition concerns in Serbia. In 2016, all but two concentrations were cleared in Phase I proceedings in 2016. Majority of the filings pertained to foreign-to-foreign transactions. The two concentrations cleared in Phase II proceedings were both horizontal mergers. In March, the Commission unconditionally cleared the acquisition of a regional dairy Niška Mlekara by one of the biggest dairies in Serbia, Imlek; whereas in August, the Commission for the third time assessed Serbian's sugar giant's Sunoko's attempt to acquire a competitor, and cleared the acquisition of the TE-TO sugar factory with several conditions attached.

In mid-November, the Commission announced yet another in-depth investigation of a horizontal merger, this time in the telecom industry: one of the leading Serbian telecommunication operators, Serbia Broadband – Srpske kablovske mreže ("SBB"), plans to acquire a smaller market player, IKOM. The obvious concern is the market share increase of an already strong SBB, particularly in the provision of television services, given that SBB's share in some of the Belgradian neighbourhoods reaches 90%. A decision is expected to be rendered by mid-March.

So far, the Commission's practice in investigating non-notified concentrations has been scarce, and no fines have yet been imposed on this ground. However, this may be about to change, as the 2017 has started with the Commission investigating a potential gun-jumping, where a change from joint to sole control over an IT company was implemented without a merger clearance.

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If the Serbian authority continues with the tempo it practiced in 2016, the 2017 promises to be intense with antitrust action.