Serbia: Competition Act under a Constitutional Challenge

Serbia

Serbia: Competition Act under a Constitutional Challenge

In the midst of the drafting of a new Competition Act, the current Serbian Competition Act has been challenged before the country’s Constitutional Court. The challenge was made by the Serbian Bar Association, as a follow-up to a joint challenge already made by a law firm and two NGOs earlier this month.

The challenge is mainly focusing on the penal provisions of the Competition Act and the current set-up where the Competition Commission, an administrative body, is both investigating alleged infringements and imposing fines for what it finds to be a competition infringement. In particular, the challenge compares the safeguards available to defendants in criminal proceedings with those available to undertakings investigated by the Competition Commission, to show the inaptness of the latter.

The Commission’s power to impose fines is not the only part of the Competition Act under challenge: its right to search business premises without a court warrant and to decide on what represents privileged communication are also tested. As a reminder, the Competition Act grants the Competition Commission the power to conduct dawn raids without a court warrant, and the Commission has conducted several such raids.

The Serbian Bar Association, the official bar association in the country, has been at loggerheads with the Competition Commission for quite some time now. Back in 2014, the competition watchdog started antitrust proceedings against the Bar Association, asserting that the association infringed competition by the way it set bar admission fees. Specifically, the bar admission fee depends on whether the lawyer comes straight out of traineeship or not, with the fee being substantially lower for lawyers from the former group.

In Serbia, constitutional challenges are made before the Constitutional Court, which inter alia has the power to decide whether general acts (including laws and decrees) are in accordance with the constitution. And the outcome of this particular constitutional challenge will be especially eagerly anticipated by the Serbian competition community, as the Constitutional Court’s conclusion is likely to have a considerable effect on how the new Competition Act will look like.

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