To complete the tetralogy, after the annual reviews of competition developments in Serbia, Montenegro, and Macedonia, here is, in a nutshell, what happened in Bosnia and Herzegovina during 2017 and what to expect in 2018.
A New Competition Council Appointed
Perhaps the most significant event of 2017 was the appointment of new members of the Competition Council, Bosnia’s competition authority. The Council has six members, appointed for a period of six years. Each of them presides over the Council during one of those six years.
The newly appointed members of the Competition Council are: Mr. Ivo Jerkić (who currently presides the Council), Dr. Stjepo Pranjić, Ms. Adisa Begić, Mr. Amir Karalić, Ms. Arijana Regoda Dražić, and Mr. Nebojša Popić.
The Focus Remains on Antitrust
What I personally like about Bosnia as a competition jurisdiction is its focus on antitrust rather than on merger control. This is in contrast with Serbia, Montenegro, and Macedonia, where merger decisions dominate – due to the low merger filing thresholds in those jurisdictions.
Also, what contributes to the high level of antitrust activity of the Bosnian competition watchdog is the fact that, in Bosnia, an antitrust proceeding can be initiated not only ex officio by the Competition Council, but also upon request of an interested party (complainant). In practice, a majority of cases are initiated by complainants and the state of affairs in Bosnia could even be qualified as quasi-private antitrust enforcement.
Back to 2017: during the previous year, the Council initiated as many as eight restrictive agreements proceedings. However, during the last year it also did not establish any infringement in the form of a restrictive agreement.
Abuse of dominance
As for abuse of dominance, the situation is similar: seven abuse of dominance proceedings were started, but only one infringement decision was rendered.
Like Serbia and Montenegro (and unlike Macedonia), Bosnia still has a notification system for individual exemption of restrictive agreements. And, based on published documents, during 2017 there were two such notifications: one was granted and the other rejected. However, the latter was rejected on procedural grounds, since the Council found that the agreement was not restrictive, as it was between related parties.
Merger Control: Dismissed Filings Dominate
Unlike Serbia, Montenegro, and Macedonia, where a transaction can be notifiable even if the target had no turnover in the respective jurisdiction, this is not the case in Bosnia, where the target’s turnover of at least EUR 4 million is required. Due to this, the number of merger decisions in Bosnia is naturally lower than in the three other Balkan jurisdictions.
Specifically, during 2017, there seem to have been only two Phase I clearances while one clearance was granted after a Phase II probe. There were also two other Phase II probes the outcomes of which are unclear – we will have to wait for more information from the Council on that.
What is also characteristic about Bosnia is that one of its merger filing thresholds is based on market shares. Due to this, the parties might not always know with certainty whether their transaction is notifiable or not. And more careful parties then file their transaction and leave to the authority whether there is a filing obligation or not. Against this background, during 2017 the Council dismissed at least eight filings as no filing obligation had existed.
An Ethnic Veto in Bosnian Competition Law Enforcement?
As reported earlier, a peculiarity of competition law enforcement in Bosnia and Herzegovina is what could be called an ‘ethnic veto’ . This is since, in order for a decision in the Competition Council to be passed, at least one representative of each of the three major ethnic groups in Bosnia must vote for it, which can lead to a blockade in the watchdog’s decision-making.
During 2017, at least two such blockades occurred, as the Council failed to reach a decision in one merger control and in one abuse of dominance case. As a result, the notified concentration was ‘cleared’ by virtue of the law and the abuse of dominance case had to be closed.
It remains to be seen whether we will be seeing this in 2018 as well, or whether the decision-making process will be changed in that respect.
2018: Expect Changes in the Competition Legislation
What awaits us in 2018 then?
To start with, Bosnia may end up with a new Competition Act, or at least with amendments of the existing one. This was announced by the Competition Council itself, which gives this announcement weight. On the same occasion, the Council announced that secondary legislation (block exemption decrees) will also be revamped.
Finally, as reported earlier, another change we may see in Bosnia during this year is a change in the way merger filing fees are calculated.
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