Serbia has recently taken significant steps towards modernising its competition law regime and harmonising it with EU legislation. The Serbian government adopted two regulations governing fines for competition law infringements and leniency policy, while the Commission for the Protection of Competition (the Commission) supplemented these with detailed guidelines. The introduced rules are intended to strengthen the fine-setting powers of the Commission conferred on it by the new Law on the Protection of Competition (the Competition Act), effective as of 1 November 2009.


On 23 July 2010, the Serbian Government adopted two regulations governing fines for competition law infringements: the Fines Regulation and the Leniency Regulation. Both entered into effect on 31 July 2010. The Commission issued corresponding guidelines which describe in more detail how the new rules will be implemented.

The importance of the recently adopted regulations shall be assessed in particular in light of the developments on the market in Serbia at the end of 2009. Namely, at the end of October 2009, just before the Competition Act replaced the previous competition regime (the Competition Act, Official Gazette of the Republic of Serbia, no. 79/05; 2005 Competition Act), an avalanche of leniency applications on distribution agreements containing resale price maintenance provisions (RPM) was filed before the Commission. Numerous manufacturers, wholesalers and retailers in Serbia reported on their distributors, who in turn reported on their own distributors, proving that RPM practice was widely spread on the Serbian market. It is believed that over 100 applications were submitted with the Commission. The applications were lodged with a sole aim of benefiting from the full immunity provided under 2005 Competition Act, regardless of whether one initiated the RPM. As the new Competition Act was to enter into force on 1 November 2009, all leniency applications were submitted before this deadline. As of November 2010, the Commission has delivered one decision, declaring the RPM provisions in contracts between Dijamant, a producer of sunflower oil, and 23 retailers on the Serbian market null and void. The Commission delivered the decision on the basis of the 2005 Competition Act, meaning that it will initiate the fining procedure before the Magistrate. It is still uncertain how these leniency applications will be treated by the Magistrate and how the Commission will process other applications.

Nevertheless, the new bylaws will provide certainty in the leniency and fining procedures.

Fining policy

The Competition Act provides that the Commission may impose monetary fines on undertakings both as a fine for the infringement of competition law and as a procedural penalty. The measures are applicable in antitrust and merger control proceedings equally. Fines for infringements may reach 10% of the total annual group turnover of the undertaking concerned while procedural penalties may range from EUR 500 to EUR 5000 for each day of non-compliance with the Commission’s request, but may not exceed 10% of annual turnover of the undertaking concerned.

The Commission’s Guidelines on the implementation of the Fines Regulation, similarly to relevant EU rules, provide for a two-step method when determining the amount of fines for competition law infringements.

First, the basic amount for each undertaking or association of undertakings will be calculated based upon the turnover from the sale of goods and services, directly or indirectly, related to the infringement, while taking into consideration the gravity and duration of the infringement. Certain practices - such as horizontal and vertical price-fixing agreements, horizontal market-sharing agreements, collective boycotts and bid-rigging – shall be considered as very severe restrictions of competition.

In a second step, the basic amount will be adjusted upwards or downwards based upon a number of aggravating and/or mitigating criteria, such as: the intent of the undertaking to commit an infringement of competition; the severity of the infringement, consequence and duration of the infringement; recidivism of the implicated undertaking; enticement of other undertakings to participate in competition law infringements; the time during which the acts representing an infringement were suspended; the measures undertaken to remedy the occurred consequences of the infringement; and the undertaking’s level of cooperation during the proceedings to establish infringements of competition.

When determining the amount of procedural penalties, criteria such as the significance of the ordered action on the outcome of the proceedings and repeated noncompliance with orders of the Commission in the same or another proceeding shall be taken into account.

The deadline for payment of fines may not be less than three months or more than a year from the day of receipt of the decision. The deadline for payment will be determined by the Commission dependent on the financial capacity of the undertaking concerned. Exceptionally, at the undertaking's request, payment in installments may be granted. However, the undertaking has to prove the existence or the certainty of the occurrence of significant and lasting financial difficulties in its business which could, as a consequence, result in bankruptcy or a longer interruption of business.

Leniency policy

The Competition Act provides that a party to a restrictive agreement may, under certain conditions, be exempt from fines or have its fine reduced if it submits evidence which enables the Commission to establish an infringement of competition rules. In early September 2010, the Commission issued guidelines (corresponding to EU standards) on the implementation of the Leniency Regulation and which govern in more detail the conditions under which leniency may be granted and the relevant procedure. As opposed to relevant EU rules, immunity from and reduction of fines are available to parties to both horizontal and vertical agreements.

Exemption from fines

An undertaking participating in a restrictive agreement shall be exempt from fines if four conditions are met:

  1. it was the first to report the agreement (which was previously unknown to the Commission or regarding which the Commission did not have sufficient evidence to initiate proceedings);
  2. it submits evidence on the restrictive agreement and/or points out to the Commission the place or the person where evidence can be found;
  3. it did not incite or coerce other undertakings to conclude or implement the restrictive agreement; and
  4. it was not the initiator or organiser of the restrictive agreement.

Reduction of fines

A party to a restrictive agreement that does not satisfy the above exemption requirements may still have its fine reduced by 30% to 50% if it is first in order for a reduction, between 20% and 30% if it is second in order, and up to 20% if it is third or subsequent in order.

In order to be granted a fine reduction, the undertaking must:

  • sign a statement undertaking to fully and continuously cooperate in good faith with the Commission until the decision on the fine becomes final and binding; submit all evidence in its possession or available to it, including documents and other evidence related to the notified agreement; and
  • without delay, cease further participation in the restrictive agreement, unless approved or requested by the Commission for the purpose of conducting an investigation and collecting evidence.

By issuing a statement, the notifying party undertakes not to act in a way that might jeopardise the procedure, and in particular not to reveal data or content from the statement and not to destroy or conceal evidence.

A leniency applicant may either notify the Commission of a restrictive agreement anonymously or make a formal request for immunity. In case of an anonymous notification, the Commission shall assess whether it has knowledge of the agreement described and/or whether it has sufficient evidence to initiate proceedings. Dependent on these circumstances, the Commission will advise the notifying party to apply for either an exemption or a reduction of fines.

If a party to a restrictive agreement does not qualify for immunity, it may apply for a reduction of fines or withdraw its request, which does not prevent the Commission from obtaining relevant evidence from said undertaking through its investigative powers.


Serbia has taken significant steps towards modernising its competition rules and bringing them into step with EU legislation. Nonetheless, it has opted for certain solutions which are broader than comparable EU standards. The new rules place emphasis on enforcement of competition rules and are intended to provide the Commission with significant tools to uncover and punish restrictive agreements, as well as other competition law violations.

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