The Serbian Competition Commission seems to want to get as many cases off the table as possible before the year’s end – it just published a decision whereby it established abuse of dominance and fined the infringing undertaking for excessive pricing. In doing so, the Commission expressly relied on EU case-law.
Background
The infringer is a company operating a bus station in a town in central Serbia. In that respect, this case is similar to another proceeding the Commission opened recently. However, the difference is that in the freshly decided case the Commission established that the abuse consisted in excessive pricing, not in price discrimination.
The company which abused its dominant position is a vertically integrated undertaking, acting both as the operator of the bus station in question and as a bus operator. This vertical integration seems to have played a part in the infringement, at least according to the Commission.
Analytical framework – the Commission relies on EU case-law
In establishing the abuse of dominance, the Commission applied the excessive pricing analytical framework for which it stated applies in the EU. Specifically, the Commission cited United Brands and Scandlines Sverige v. Port of Helsingborg.
According to the Commission, the two key factors in establishing the presence of excessive pricing are the costs which can be allocated to the product and the prices charged by other undertakings in the same line of business. And, upon applying this methodology, the Commission established that the price for the station services charged by the bus operator was indeed excessive.
Specifically, the Commission established that the costs which could be allocated to the service in question justified a price of only little more than a half of the price actually charged. Also, upon looking into the prices for the same service charged by comparable bus stations, the Commission found that that the price charged by the investigated undertaking was almost twice as high as the average price charged by others.
Negative effects and fine
The Commission also established that the infringement led to actual negative effects – due to the high price for the stations services charged by the infringer, the bus operators using the station had increased the price charged to end-users (passengers), while some bus operators terminated lines using the station altogether.
Upon establishing that the abuse of dominance occurred, the Commission fined the bus operator 1.32% of its turnover in the relevant year.
Not the first excessive pricing case
This is not the first time that the Serbian Commission established that the pricing of an undertaking infringed Serbian competition regulations – back in 2007, the Commission found that the Belgrade bus station was excessively pricing for tokens used to enter the station while in 2014 the Commission established the excessive pricing of the company managing cemeteries in Belgrade.
There have also been instances where the Commission investigated excessive pricing but in the end did not find any wrongdoing. For instance, in 2007, the Commission dismissed a complaint against the largest Serbian cable operator Serbia Broadband (SBB) for alleged excessive prices to end-users, preferring to leave the matter to the telecoms regulator.