Law on Protection of Competition

Infringements of Competition

Law on Protection of Competition (“Official Herald of the Republic of Serbia”, Nos. 51/2009 and 95/2013) shall regulate protection of competition on the market of the Republic of Serbia, as well as the position, organization and competencies of the Commission for Protection of Competition (hereinafter referred to as the Commission).

Pursuant to Law on Protection of Competition (“Official Herald of the Republic of Serbia”, Nos. 51/2009 and 95/2013) infringements of competition are the acts or deeds of undertakings with objective or the consequence by which the competition is considerably limited, violated or prevented.

Restrictive agreements

Definition of restrictive agreement

Restrictive agreements are those made by undertakings with objective or the consequence to considerably limit, violate or prevente the competition on the territory of the Republic of Serbia.

Restrictive agreements could be contracts, certain items in contracts, specified or implicit, concerted practices, as well as the decisions of associations of undertakings, where:

  • the purchase or sale prices or other conditions of trading are determined directly or indirectly
  • the production, market, technical development or investments are limited and controlled
  • unequal conditions of operations are applied in same activities for different undertakings, through which the undertakings are put into an unfavourable position in relation to their competition
  • the contract or agreement is conditioned with acceptance of additional obligations. that by their nature and trading habits and practice are not connected with the subject of the agreement
  • the markets or procurement sources are divided.

Restrictive agreements are prohibited and void, except if excluded from prohibition pursuant to Law on Protection of Competition (“Official Herald of the Republic of Serbia”, Nos. 51/2009 and 95/2013).

Exemptions

Restrictive agreements could be allowed if they contribute to improvement of the production and trade, or facilitate a technical or economic progress, providing the consumers with a fair share of benefits, under condition they do not impose limitations upon undertakings that are not necessary for achieving the goal of the agreement, or they do not facilitate removing the competition on a relevant market or in its significant part.

Individual exemptions

Upon request of participants in the restrictive agreement, the Commission may decide on exemption of certain individual restrictive agreement from the prohibition (hereinafter referred to as the individual exemption). The Government prescribes the contents of the request in more details. The period refered to by individual exemption may not exceed eight years

The party that submitted the request for individual exemption bears the burden of proof for the fulfilment of the conditions for exemption.

Block exemptions

Exemption from the prohibition of a restrictive agreement may pertain to certain categories of the agreements, under the conditions for exemption, as well as other special conditions pertaining to the kind and contents of the agreement and/or its duration. The Government prescribes the categories and special conditions in more details.

Restrictive agreements that fulfil the conditions pursuant to the previous paragraph are not submitted to the Commission for exemption.

Agreements of minor importance

Agreements of minor importance are those made by undertakings with total market share on the relevant market of goods and services on the territory of the Republic of Serbia that does not exceed:

  • 10% share, if the agreement participants operate at the same level of the chain of production and trade (horizontal agreements)
  • 15% share, if the agreement participants are at different levels of production and trading chain (vertical agreements)
  • 10% share, if the agreement has the features of both horizontal and vertical agreements, or where it is difficult to determine whether the agreement is vertical or horizontal
  • 30% share, in case of agreements with similar influence on the market made by different undertakings, if the individual market share of each of them does not exceed 5per cent on each separate market, on which the effects of the agreement are manifested.

Agreements of minor importance are allowed unless the purpose of the horizontal agreement is determination of prices or limitation of production or sale, or the division of the supply market, as well as if the purpose of the vertical agreement is determination of prices, or the division of the market.

Abuse of a dominant position

Dominant position on the market

Dominant position in a relevant market is deemed to be the position of an undertaking which, due to its market strength, may operate in the relevant market to a large extent independently in relation to the actual or potential competitors, customers, suppliers or consumers.

The market strength of such undertaking is determined in relation to the relevant economic and other indicators, in particular:

  • Structure of the relevant market
  • Market share of an undertaking whose dominant position is being determined, especially if greater than 40% of the determined relevant market
  • Actual and potential competitors
  • Economic and financial strength
  • Degree of vertical integration
  • Advantages in access to supply and distribution markets
  • Legal or factual market access obstacles for other undertakings
  • Strength of the buyer
  • Technological advantages, intellectual property rights.

Two or more legally independent undertakings may have a dominant position if they are connected by economic links in such way that they jointly operate on the relevant market or act like one undertaking (collective dominance).

The burden of proof of a dominant position on the relevant market rests on the Commission.

Abuse of a dominant position

The abuse of a dominant position in the market shall be prohibited.

Abuse of a dominant position in the market is deemed to be:

  • direct or indirect imposing of unjust purchase or sale price, or of other unfair business conditions
  • limiting the production, market or technical development
  • applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage
  • conditioning the contract with the other party accepting additional obligations, which, by its nature or by commercial practice have no connection with the subject of the contract.

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