REPUBLIC of SERBIA Commission for Protection of Competition

REPUBLIC OF SERBIA Commission for Protection of Competition ANNUAL REPORT OF THE COMMISSION FOR PROTECTION OF COMPETITION FOR 2012 Belgrade, February 2013 CONTENTS 1. INTRODUCTION ......................................................................................................................................... 4 2. ANNUAL PROGRESS REPORT OF THE EUROPEAN COMMISSION FOR SERBIA -CHAPTER 8, COMPETITION POLICY ........................................................................................................................................................... 6 3. INITIATIVE TO ADOPT THE LAW ON AMENDING THE LAW ON PROTECTION OF COMPETITION ............. 7 4. INSTITUTIONAL AND ADMINISTRATIVE CAPACITIES ................................................................................. 9 4.1. Institutional capacity .......................................................................................................................... 9 4.2. Administrative capacity .................................................................................................................... 10 4.3. Financial Report ................................................................................................................................ 11 5. VIOLATION OF COMPETITION ................................................................................................................. 17 5.1. Key moments .................................................................................................................................... 17 5.1.1. Cases completed in the administrative procedure ................................................................... 19 5.1.2. Administrative procedures in progress ..................................................................................... 24 5.1.3. Measures for protection of competition ................................................................................... 29 5.2. Exemption from the prohibition of restrictive agreements ............................................................. 33 5.2.1. Cases completed in Administrative Procedure ......................................................................... 34 5.2.2. Administrative procedures in process ....................................................................................... 41 5.3. Initiatives to institute proceedings to determine violations of competition ................................... 41 6. INVESTIGATION OF CONCETRATION ....................................................................................................... 52 6.1 Concentrations approved in summary proceedings ......................................................................... 52 6.2. Concentrations that are solved ex officio ........................................................................................ 70 6.3. Information about the findings of the sale of a 50% shares in the company "Politika novine i magazin" (pnm) d.o.o. Belgrade in regard to the applications of the law on protection of competition ................................................................................................................................................................. 75 7. JUDICIAL REVIEW OF THE DECISIONS ...................................................................................................... 77 8. INSTRUCTIONS AND OPINIONS ............................................................................................................... 78 8.1. Application of the principles in ensuring competition in the public procurement .......................... 78 8.2. Opinions given in regulations affecting the competition in the market .......................................... 78 8.3. Opinions on the Implementation of the Law on Protection of Competition ................................... 84 8.3.1 Interpretation of the provisions on restrictive agreements ...................................................... 84 8.3.2. Interpretation of the provisions on abuse of dominant position ............................................. 87 8.3.3. Interpretation of the provisions of the concentration .............................................................. 89 8.4. Opinion under Article 157 of the Law on Bankruptcy ...................................................................... 91 9. SECTOR ANALYSES ................................................................................................................................... 96 9.1. Sectoral analysis of the market of wholesale and retail of petroleum products in 2011 ................ 96 9.2. Analysis of the conditions of competition in the sector of production and processing of milk and milk products ........................................................................................................................................... 98 10. TRANSPARENCY IN WORK ................................................................................................................... 100 11. COOPERATION WITH AUTHORITIES AND REGULATORY BODIES OF GOVERNMENT IN SERBIA ........ 101 11.1. Participation of Commission’s Representative in the work of the Commission for State Aid Control ................................................................................................................................................... 101 12. INTERNATIONAL COOPERATION ......................................................................................................... 103 12.1. Relations with the European Union............................................................................................ 103 12.1.1. Commission's activities in the EU accession process ............................................................ 103 12.1.2. Obligations under the Stabilization and Association Agreement (SAA)and cooperation with EU institutions ................................................................................................................................... 103 12.1.3. Participation in the translation of EU into Sserbian language - professional editing of translations of European legislation .................................................................................................. 104 12.1.4. Projects financed by the EU ................................................................................................. 105 12.2. Relations with other international organizations ........................................................................ 107 12.2.1. UNCTAD (United Nations Conference on Trade and Development) ..................................... 107 12.2.2. International Competition Network (ICN) ............................................................................. 109 12.2.3. Regional Competition Center, The Organisation of Economic Co-operation and Development (OECD) – Budapest...................................................................................................... 110 12.2.4. Sofia Competition Forum ...................................................................................................... 110 12.2.5. Network for Competition of the Energy Community ............................................................ 111 12.2.6. Global Competition Review ................................................................................................... 111 12.3. Internships ................................................................................................................................. 112 12.3.1. Internship Projects for employees in European Competition Authorities ............................ 112 12.4. Protocols on Cooperation (Bilateral Cooperation) .................................................................... 113 12.5. International Conferences and Seminars .................................................................................. 114 1. INTRODUCTION In the past, 2012, the Commission for Protection of Competition (hereinafter: the Commission) has built its position and exercised public authority in resolving the rights and obligations of market participants in accordance with the Law on Protection of Competition ("Official Gazette of Republic of Serbia" No. 51/09, hereinafter: Law), through its activities to promote the rules of competition and competitive business environment, as well as through the international cooperation. Achieved legal and institutional framework is the most important requirement for the effective treatment and resolution of the rights and obligations of market participants. Implementation of the provisions on measures for protection of competition and procedural breaches of competition, leniency, structural and behavioral measures, cease and desist orders as a checking mechanism of market behavior, and so on, has significantly contributed to the efficiency of the competition. The legal framework should be developed, bearing in mind the accession of Serbia to the EU and the dynamics of the market, both through further harmonization of certain legal provisions with the legal rules of the EU and the adoption of policies and guidelines, with the aim and purpose of creating a stable and distinctive business environment. Continuous compliance of the practice with the competition practice of the authorities in the EU is the aim that the Commission is trying to achieve. Good work organization and effective commitment of resources, both human and financial, are necessary in a situation where the number of employees is considerably lower than projected and desired, and where

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