The Serbian NCA has launched an abuse of dominance investigation against Serbia Broadband (SBB), the largest Serbian cable operator. The operator is part of United Group and is ultimately controlled by KKR. Specifically, the NCA is investigating whether SBB imposed unfair prices on consumers by a recent hike in cable subscription.
To understand the background of this case, we need to go a step back, to the March of last year, when the Serbian NCA conditionally approved SBB’s takeover of a competing cable operator (I.KOM). And one of the conditions under which the clearance was granted was SBB’s obligation to, within a period of two years, inform the NCA of any price hike and explain the reasons behind the price increase.
According to the procedural order on initiating the abuse of dominance probe against SBB, as of 1 January 2018 the operator increased the price of cable subscription from RSD 1,295 to RSD 1,395 (EUR 1 = approx. RSD 120). And it seems that the NCA was not satisfied with the explanation which SBB gave for the price hike.
This is not the first time that the operator has faced antitrust scrutiny in Serbia.
Back in 2007, the NCA had also investigated unfair pricing allegations against SBB, also concerning the price the cable operator was charging its users for subscription. However, in the end NCA did not find any wrongdoing by SBB, noting that the telecoms regulator had declared SBB an operator with significant market power and had required that SBB obtain the regulator’s consent for any change in the price of subscription.
Further, in 2008, the NCA rendered a decision establishing that the Serbian cable and DTH operator Serbia Broadband (SBB) committed abuse of dominance by entering into exclusive agreements for distribution of several popular TV channels on the direct-to-home (DTH) platform. No fine was imposed since at the time the NCA did not have the power to impose fines.
If the NCA would establish that SBB indeed abused its dominant position, the undertaking could face a fine of up to 10% of its Serbian turnover.