Criminal sanctions for competition law infringements came into the spotlight in Serbia at the end of 2016, when the Serbian Parliament adopted amendments to the Criminal Code. Nevertheless, it may turn out that the criminalization is only a paper tiger.
Cartels were a criminal offense even before the 2016 legislation change. Actually, it was not only cartels that were covered by the old criminal act: abuse of monopolistic position (which does not exist as a notion in Serbian competition law), abuse of dominance, and conclusion of a ‘monopolistic’ agreement all fell under the prohibition. However, the offense never really came to life, as no-one was ever convicted for it.
Apart from unclear terminology which was not aligned with competition regulations, perhaps the main deficiency of the old version of the offense was that it did not regulate the relationship between the criminal offense and leniency granted under competition regulations. The new text of the offense is an upgrade, but perhaps more could have been done.
The Criminal Code now prohibits the conclusion of a restrictive agreement aimed at fixing prices, limiting production or sale or market sharing. These are what is generally referred to as ‘hardcore’ restraints. Since there is no express mention of only horizontal agreements, the offense arguably covers hardcore vertical restraints as well. This seems too harsh, especially since real negative effects of many vertical restraints are disputable.
While it purportedly covers both horizontal and vertical agreements, the criminal act clearly does not cover abuse of dominance. It is in that sense narrower than the previous version of the law.
Unlike the old criminal offense, which was completely silent on the relationship between leniency in administrative proceedings and criminal responsibility, the new one attempts to address this issue. But not in a completely adequate way.
It is now prescribed that the offender, who satisfies the conditions for immunity from fine within the meaning of the competition legislation, may be released from punishment (the threatened criminal sanction is a prison sentence of up to five years and a fine). The meaning of this is not entirely clear as the competition regulations do not prescribe fines (or immunity) for individuals, but pertain only to undertakings. Theoretically, apart from individuals, companies could also face criminal prosecution, but that seems an even more unlikely prospect.
In any event, judging from the enforcement record of the previous criminal offense covering antitrust infringements, the new one may also turn out to be only a dead letter of the law. Which is not necessarily a bad thing, especially if criminal enforcement would turn not only to cartels but also to more innocuous vertical agreements.