Serbia: Wait for First Cross-Border Antitrust Fine Continues

Serbia

Serbia: Wait for First Cross-Border Antitrust Fine Continues

Last year, the Serbian national competition authority (NCA) for the first time launched an antitrust probe against a foreign-based entity – Polish sports equipment manufacturer Polanik. Now, the NCA has decided to terminate the investigation, which means that the wait for the first cross-border antitrust fine in Serbia continues.

Why did the NCA start the investigation?

The probe was started upon complaint by Polanik’s Serbian competitor, who had complained to the Serbian NCA that a vertical agreement which Polanik entered into with its Serbian distributor was not in accordance with Serbian antitrust rules. Specifically, the complaint was that the market share of the parties to the agreement exceeded the Serbian block exemption threshold for vertical agreements (25%).

Further, the complainant had alleged, the parties had failed to obtain an individual exemption for the agreement. Unlike in the EU, in Serbia there is no self-assessment with respect to individual exemption of restrictive agreements: to benefit from an individual exemption, an agreement needs to be notified to the NCA in advance. This makes the Serbian system comparable to the one which existed in the EU under Regulation 17/62.

Why did the NCA abandon the investigation?

During the antitrust probe, the Serbian NCA established that the market shares of the parties to the contested agreement (Polanik and its Serbian distributor) in fact did not exceed 25% and that the agreement was hence covered by the block exemption. Accordingly, the agreement had been automatically block exempted from antitrust prohibition and the NCA did not see any grounds for continuing its probe.

How often does the Serbian NCA investigate foreign-based entities?

The described probe against Polanik was the NCA’s first investigation of a foreign-based entity. However, soon after, the NCA has also started investigating international payment organizations Mastercard and Visa, both concerning interchange fees. These investigations are pending and it remains to be seen whether they will end with a fine.

What is the NCA’s view of cross-border activities in the competition law arena?

This is not straightforward.

On one hand, with respect to extraterritorial concentrations, the NCA has adopted the approach that, as long as the jurisdictional thresholds are met, a transaction must be filed in Serbia. This even if the transaction has no effect in Serbia whatsoever.

On the other hand, the NCA has also pronounced it has no jurisdiction over extraterritorial vertical agreements. An example of such an agreement would be an exclusive distribution agreement between a Serbian supplier and a foreign distributor.

Key takeaway

While it has started investigating foreign-based companies, too, the Serbian NCA still seems reluctant to impose fines for antitrust violations on companies based outside Serbia.

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