Competition Law in Montenegro: 2018

Montenegro

Competition Law in Montenegro: 2018

What was new in competition law in Montenegro in the previous year?

NCA’s jurisdiction extended to State aid

Perhaps the most important development in competition law in Montenegro during 2018 was extension of the jurisdiction of the Montenegrin NCA to State aid matters. Previously, the NCA had been dealing only with antitrust (restrictive agreements and abuse of dominance) and merger control issues, while State aid matters were the prerogative of a, now abolished, special Commission for the Control of State Aid. It is still early to say how this change will affect the practice of the authority.

Sector inquiries abound

While it does not have the power to impose fines, the NCA does have the power to conduct sector inquiries. And it used that prerogative extensively in 2018. Specifically, during the previous year the Montenegrin NCA examined the following markets:

  • Distribution of media content and sports channels. The NCA performed the analysis based on information obtained from market participants and the relevant sector regulators. Unfortunately, the NCA did not publish its findings, citing the sensitivity of the obtained information.
  • Wholesale and retail of sugar and sunflower oil. The NCA sought to establish the relationships between the main competitors on these markets, as well as the vertical relationships between producers, wholesalers, and retailers. During the investigation, the NCA had turned to undertakings active in the wholesale and retail trade of sugar and sunflower oil, requesting copies of commercial agreements as well as other relevant information. Ultimately, the NCA did not find any foul play.
  • Driving schools. The NCA also probed driving schools in the Montenegrin town of Nikšić. Specifically, the NCA was checking reports that driving schools in Nikšić had agreed on the prices for driver training in the town. As a result, the NCA preliminarily established that the driving schools had formally agreed on the prices offered to prospective drivers and launched a formal cartel investigation against the schools.
  • Disposal of municipal waste. The NCA also took a look at the conditions on the market for waste disposal across the country. During this market investigation, the NCA assessed how waste disposal companies in Montenegro form their prices. In the end, the market investigation did not indicate any competition law infringement.

Antitrust

As is well known about Montenegrin competition law, the NCA does not have the power to impose fine for antitrust violations. However, this does not prevent the NCA from rendering infringement decisions, based on which the competent misdemeanor court later may issue a fine.

A) Two new infringement decisions

In the previous year, the Montenegrin NCA closed two antitrust cases, both in the area of restrictive agreements.

As noted, during a sector inquiry into the driving school market in a Montenegrin town, the NCA found indications of collusion between the driving schools active in the town. Upon conducting an antitrust investigation, the NCA found evidence that the driving schools had indeed agreed on uniform prices for their services, by a written decision adopted by the parties involved. Such evidence surely made the NCA’s job of establishing an infringement easier.

In the other infringement decision, the NCA found that an agreement on joint participation in a public procurement procedure concerning medical devices had amounted to a restrictive agreement. Since it does not have the power to impose fines, the NCA could only declare the joint bid agreement null and void.

B) Individual exemption still a rare animal

Similarly to Serbia, Montenegro also has a system of individual exemption of restrictive agreements based on prior notification to the NCA. In other words, in Montenegrin competition there is no self-assessment concerning the conditions for individual exemption from prohibition. This system is comparable to the one which in the EU existed under Regulation 17/62.

It seems the undertakings active on the Montenegrin market are not using this procedure extensively, as during 2018 the NCA granted only one individual exemption. Perhaps this number rise will rise if the NCA later published additional individual exemption decisions, but in any case it should not be expected that this rise would be significant.

This situation is similar to last year’s, when the NCA granted two individual exemptions (only one of which was partially published). In any event, the one granted individual exemption from 2018 concerned a request by three insurance companies active on the Montenegrin market. The exemption pertains to joint participation in a tender organized by the Montenegrin electric power company and was granted for a period of one year.

Merger control

Similarly to Serbia, Montenegrin competition law also contains very low merger filing thresholds, which catch even transactions which have no connection with the Montenegrin market. As a result, the largest part of the NCA’s workload pertains to merger control.

As described, in the previous year the Montenegrin NCA rendered only two antitrust infringement decisions. On the other hand, it issued at least 32 new merger decisions. This is down from 37 clearances issued in 2017, but this number may still rise once all merger decisions from 2018 are published. All 2018 merger decisions were unconditional Phase I clearances.

What to pay attention to in 2019?

Probably, the most interesting thing to look at during 2019 will be how the Montenegrin NCA will cope with State aid issues, which were assigned to it in 2018.

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