The Serbian Competition Commission is well known locally for its track record of imposing fines for antitrust infringements. In late 2009, a new law came into effect authorising the Competition Commission to impose fines directly; however, no one expected that by 2014 the total amount of fines it had imposed would reach approximately €40 million. While the significant amount of these fines in the end was not actually collected since the Commission's decisions imposing them were overturned by courts, this nevertheless shows the competition authority's willingness and readiness to use the full scope of its statutory powers when going against what it sees as infringements of competition. Although its fining policy in relation to merger control is falling behind antitrust, the merger control has set another stellar record in the number of cases reviewed and cleared over the years.

Outside Serbia, the Competition Commission is best known for being one of the jurisdictions consistently considered in multi-jurisdictional filings. Despite its relatively small population (around 7 million), Serbia has had a disproportionate number of merger control cases - around 100 a year on average since the enactment of the first EU-modelled competition law in 2005. Because of its low notification thresholds and no local effects required, European and global transactions involving at least one party with a material business interest in Serbia need to be pre-notified to the Competition Commission in Serbia. The merger control in Serbia is that of ex ante control of concentrations.

This experience in dealing with merger control cases has helped the authority develop its capacity and gain a better understanding of how markets work. It is now well equipped to handle the most complex cases and deal with them within a relatively short time frame. Additionally, it has consistently shortened the review period in more straightforward cases.

The Competition Law of 2009 moved the Serbian antitrust regime closer to EU law. The Law was amended in November 2013 to overcome the procedural deficiencies that had been realised in practice since 2009 (for instance, the longer periods of the statute of limitations for imposing fines were introduced). The 2013 amendments changed the deadline for the issuance of merger clearances in inquiry proceedings (Phase II). The Competition Commission is now required to issue its decision in an inquiry proceeding within four months from commencing the Phase II procedure (instead of three months, as was the case before the amendments). The substantive regime is to a large extent identical to the regime introduced by the first EU-modelled competition law, the Competition Law of 2005. Thus, the current regime mostly meets the standard of review that exists in the EU.

Since 2008, the Serbian competition rules have been formally exposed to the influence and case law of the EU. Under the Stabilisation and Association Agreement (SAA) with the EU, which entered into force on 1 September 2013, Serbia formalised its commitment to harmonise its legislative framework with that of the EU.

The Central European Free Trade Agreement (CEFTA), similar to the SAA, envisions the application of EU competition law principles and rules to all matters in which trade among the member countries may be affected. Therefore, while Serbian competition law normally would not apply to sales outside Serbia, the CEFTA rules will, together with the laws of Serbia and the interpretative criteria and principles of the EU, which the national authorities are obliged to follow. While the Commission considered the CEFTA area as a free-trade zone in its merger review practice, there has been no case law so far regarding competition infringements in cross-border trade between member countries.

The Competition Commission, which is seated in Belgrade, is composed of two decision-making bodies, the President and the Council, which are appointed by Parliament. The Council consists of the President and four other members. The Commission is an independent regulatory body that is authorised to implement the law, and is responsible exclusively to Parliament.

The President of the Commission, inter alia, represents the Commission, signs procedural orders on commencement of inquiry proceedings, issues decisions in fast-track procedures and decides on appeals against conclusions issued by the case handlers.

Parties may challenge the Competition Commission's decisions before the Administrative Court, which may, either set aside the Commission's decisions and return it to the Commission to repeat the procedure, or take full jurisdiction over the matter and replace the Commission's decision with its own. In practice, when it wants to strike down a Commission decision, the Administrative Court is reluctant to take full jurisdiction over competition law matters and prefers to set aside the Commission decision and return it to the authority for reconsideration.

The Administrative Court is normally required to test the Competition Commission's findings and hear evidence on the issue, although it rarely takes any such action. The Administrative Court's judgments are final, but the parties may appeal them to the Supreme Court of Cassation, which can only decide on points of law.

Since 2006, the Competition Commission has blocked two transactions and has imposed remedies in close to 20 other cases. With regard to remedies, it has imposed remedies even in foreign-to-foreign transactions. Previously, such remedies had been more complex structural remedies, but recently it tends to impose both structural and behavioural remedies equally.

Certain specific rules and regulations, including the occasional deviation from the general competition law regime, are contained in the appropriate sector legislation; for example, banking regulations (specific merger thresholds that concurrently have to be approved by the National Bank), telecom rules (ex ante regulation and special rules regarding significant market power operators), public health norms (maximisation of drug prices), media laws (‘disruption of media pluralism') or even local ordinances in certain cases (fixing of local taxi and public transport fares).


Number-wise, merger control still represents the most significant part of the Commission's practice, accounting for the vast majority of its decisions (111 merger decisions were issued in 2016, compared to less than 10 in the sphere of antitrust).

109 of the concentrations the Commission examined during 2016 did not raise serious competition concerns, and all of them were unconditionally cleared in Phase I. Only two concentrations went into in-depth, Phase II proceedings where one was cleared with commitments. This should not be interpreted as the authority's reluctance to afford adequate scrutiny to mergers it sees as potentially problematic; rather, such statistics would appear to simply evidence that during the previous year there were not too many problematic mergers on the Commission's table.

The Competition Commission has developed its capacities, both quantitatively and qualitatively. The number of case handlers has increased as well as the number of professional trainings and educational efforts aimed at increasing specialisations of the case handlers. Therefore an even further increase in the overall activities of the Competition Commission can be expected. In several public announcements, it repeatedly pointed out its intentions to increase its investigative activities aimed at preventing breaches of the Competition Law.

i New Merger Control Regulation

In February 2016, the new Merger Control Regulation, governing the content and the manner of submitting merger filings to the Competition Commission, entered into force. The new regulation further aligns Serbian legislation with the relevant EU acquis and significantly facilitates the merger filing process. The most important novelty introduced by the regulation is a short-form merger filing. When filing transactions that are unlikely to raise any competition concern, the applicants are now relieved of the burden of collecting and delivering to the Competition Commission certain items that were mandatory under the old regime.

The submission of a short-form notification is possible if the parties are neither competing in the same market nor present on vertically related markets, and their market shares do not exceed the thresholds prescribed in the regulation. An abbreviated filing is also possible if there is a horizontal overlap between the parties or the parties are active in vertically related markets. The submission of a short-form notification is also possible if the applicant acquires sole control of an undertaking over which it already exercises joint control.

ii Imlek/Niška mlekara merger

In March 2016, following an in-depth (Phase II) merger assessment, the Competition Commission unconditionally cleared the takeover of Niška mlekara by Imlek, the largest Serbian dairy. The Commission identified three relevant product markets: (1) purchase of raw milk for industrial processing; (2) production of milk and dairy products; and (3) sale of milk and dairy products.

From a substantive viewpoint, the most interesting part of the clearance decision is the Commission's assessment of the market for the purchase of raw milk. Specifically of interest is the Commission's reliance on continuous chains of substitution in order to define the relevant geographic market as national. The Serbian Commission relied on the continuous chain of substitution concept, citing EU cases (Pilkington/SIV and AstraZeneca/Novartis).

When analysing the effects the merger would have on the relevant markets, the Commission did not establish any serious competition concern arising out of the merger and cleared the concentration without any strings attached.

iii Sunoko/Fabrika Šećera TE-TO Senta

In August 2016, after a Phase II (in-depth) investigation, the Competition Commission gave conditional approval, to Sunoko's acquisition of the Star Šećer company and its subsidiary Te-To - the owner of the sugar factory in town of Senta. In this manner the leading sugar producer in Serbia - Sunoko, acquired its close competitor. No divestments have been required from Sunoko, but rather Sunoko has been subjected to a number of behavioural measures. This complex merger concerned primarily the market of production and wholesale of sugar made out of sugar beet. The case represents a landmark case that led to further consolidation of the Serbian sugar market preparing it for the challenges of the expected liberalisation of the European sugar market.


i Definition of concentration

The Serbian Competition Law defines concentrations in the same way as the EUMR. Essentially, all forms of ‘amalgamations' of previously independent undertakings qualify as concentrations. In formal terms, a concentration can result from:

  • a mergers and other status changes;
  • b acquisition of direct or indirect control by one or more undertakings over another undertaking or part of an undertaking; or
  • c full functional joint ventures, where full functionality is interpreted similarly to the EUMR's interpretation (e.g., creation of a new undertaking by two or more independent undertakings that will exercise joint control over the new undertaking, but that will be independent from its shareholders and have full access to the market).

The notion of control is practically identical to that used in the EUMR.

The following are not concentrations:

  • a temporary acquisitions of shares by banks and other financial institutions in the course of regular business activities, assuming they intend to dispose of the shares and assuming there is no change of control on a lasting basis;
  • b acquisitions of shares by investment funds, assuming the shares are used only for maintaining the value of the business;
  • c cooperative joint ventures; and
  • d acquisition of control by a bankruptcy administrator.
ii Merger control thresholds

Merger filings are mandatory in Serbia if either of the following two thresholds are met:

  • a the combined annual turnover of all the parties to the concentration realised on the world market in the previous accounting year exceeds €100 million, where at least one of the parties to the concentration had an annual turnover exceeding €10 million in the Serbian market; or
  • b the combined annual turnover of at least two parties to the concentration on the Serbian market exceeded €20 million in the previous accounting year, where at least two of the parties to the concentration each had an annual turnover exceeding €1 million in the Serbian market.

The Competition Law also applies to foreign-to-foreign mergers, in which case the same jurisdictional thresholds apply. Therefore, there is no local effects doctrine prescribed under the Competition Law. The Competition Commission has in many cases examined and issued clearances in foreign-to-foreign transactions. It has taken a very strict and formalistic approach in this respect, and it requires mandatory filing whenever either of the two thresholds is met. Normally, foreign-to-foreign mergers without any competition concerns in the local Serbian market will be processed through a simplified Phase I proceeding.

Additional rules may apply for certain sectors (i.e., banking, insurance, telecommunications and media).

iii Procedure
Filing deadlines

The merger notification must be filed with the Competition Commission within 15 calendar days of the date of entering into the binding agreement, the announcement of the public offer or the acquisition of controlling shares, whichever takes place first. If the parties do not file in a timely manner, the Competition Commission may impose fines ranging from €500 to €5,000 for each day of late filing. The filing can be made based on a non-binding letter of intent, memorandum of understanding or any similar document showing both parties' serious intent to enter into the transaction in which case the 15-day deadline does not apply. The Commission has so far been reluctant to accept unilateral declarations or commitments as valid proof of this.

Pre-notification discussions

The Competition Law does not provide for pre-notification discussions with the Competition Commission. However, informal discussions with the authority are possible, in particular concerning mergers that are expected to raise competition concerns and go through Phase II review. In relation to Phase I merger filings, pre-notification discussions are not common and given the effectiveness of Phase I reviews, they are not needed. The duration of informal discussions would depend on the complexity of the case in question. Any representations made orally by the Commission are not legally binding on them.

Length of review

The length of review depends on whether the Commission decides on implementing fast-track (Phase I) or inquiry proceedings (Phase II). For Phase I, the statutory deadline is one calendar month after filing a complete merger notification. Requests for information may restart the clock, however, in practice the deadline is usually calculated from the initial filing. Phase II can only be initiated after the Phase I proceeding has expired; the Commission then has a time frame of four calendar months to issue a decision in this case. If the Commission does not issue a decision either clearing (conditionally or unconditionally) or forbidding the merger within the above-cited deadlines, the merger is considered to be cleared.

Standstill obligation

The law prescribes a standstill obligation - the parties must suspend the implementation of the transaction until the clearance is issued, or until the statutory deadlines have expired.

Mandatory stay of the concentration does not prevent the implementation of a takeover notified to the relevant authority pursuant to the law regulating the takeover of joint stock companies, or the law regulating privatisations, under the condition that the notification of concentration is made in a timely manner, that the acquirer of control does not execute its managing rights based on the acquired rights, or that it does so only for the purpose of maintaining the full value of investments and based on a special approval obtained from the Commission. So far, in practice the Competition Commission has been reluctant to issue such an approval.

Confidential information

Parties may classify as confidential sensitive information and documents they are submitting as part of the merger control proceedings. Provided that the party shows that it will suffer substantial damage due to publication of such sensitive information or documents, such items will not be published or otherwise made accessible to the public. The decisions of the Commission, apart from information classified as confidential, are regularly published on its website.

Merger clearances with commitments

The first ‘conditional' clearances in Serbia were issued almost a decade ago. In their form, the Competition Commission's conditional decisions were very similar to its regular (unconditional) clearances. All of the conditional clearances were issued by way of simplified procedures, even though one would expect that an in-depth procedure be initiated once the competition authority reached the conclusion that conditions and obligations must be imposed. In those cases, the Competition Commission would simply conclude, at a certain stage of the review process, that the merger filing could neither be cleared nor prohibited, but rather that certain conditions had to be imposed on the applicant. Such conditions were those that the competition authority found to be most appropriate in the case in question, and unfortunately usually imposed without any consultations with the applicant itself.

These shortcomings have been overcome over time. In the Stampa Sistem/Futura Plus case, decided in 2012, the Competition Commission followed the basic EU merger control rules that apply to clearances with conditions and obligations. This was the first case that included negotiations between the competition authority and the applicant, and the applicant's proposal of both structural and behavioural measures led to the issuance of a merger clearance acceptable to the competition authority.

The Competition Commission is now well versed in dealing with commitments in the merger context - not only in assessing them during the merger control procedure, but also in monitoring their implementation post-merger. The latest Commission's merger clearance with strings attached came in August of 2016, in the Sunoko/Fabriak Šećera Te-To case, when the authority was prepared to clear the merger only subject to the implementation of a various behavioural measures - aimed at monitoring Sunoko's business and pricing policy in Serbia.

In-depth merger control procedure (Phase II)

The Competition Commission may initiate an in-depth merger control procedure in two situations: (1) if the combined market share of the parties on the relevant market in Serbia amounts to at least 40 per cent or the Commission otherwise reasonably assumes that the concentration raises serious competition concerns (e.g., if the concentration leads to a significant prevention, limitation or distortion of competition on the relevant market); or (2) if a notifiable concentration was implemented without being approved by the Commission.

During the in-depth (Phase II) procedure, it is common for the authority to contact the parties' main competitors, their largest suppliers and buyers in order to assess what their expectations of the concentration in question are. For instance, the authority may want to establish whether the competitors, suppliers and buyers estimate that their position will be degraded or perhaps improved by the implementation of the concentration.

If it finds that the concentration does not satisfy the conditions for being cleared, it will issue to the applicant a statement of objections and invite the applicant to respond within the deadline given by the Commission. In its response, the applicant may offer conditions it is willing to accept in order to obtain the Commission's clearance. When it finds the offered conditions satisfactory, the Commission will clear the concentration conditionally. Also, it is possible and common to discuss and negotiate the proposed conditions with the Competition Commission before the final proposal of the conditions is submitted.

The maximum duration of the Phase II procedure is four months. If, during that time frame, the Commission does not decide the case, the concentration is deemed cleared by virtue of the law. As far as we are aware, there have not been any such cases thus far.

Fees and penalties

The applicant must pay a fee for the issuance of the clearance in summary proceedings amounting to 0.03 per cent of the total worldwide annual income realised by the merging parties (capped at €25,000). The fee for the issuance of a merger clearance in the inquiry proceedings is set at 0.07 per cent of the total annual income realised by the merging parties (capped at €50,000). If the Commission rejects the notification on procedural grounds, the fee is €500; should the Commission prohibit a transaction, the fee for issuance of such a decision is €1,200.

Implementing a concentration that was not notified or not cleared can result in a fine of up to 10 per cent of the infringing undertaking's total annual turnover realised on the Serbian market in the year prior to the start of the proceedings. Late filings may be sanctioned with a procedural penalty amounting to between €500 and €5,000 for each day of failing to file the notification within the prescribed 15-day deadline. The procedural penalty is also capped at 10 per cent of the infringing undertaking's total annual turnover.

To date, we are not aware of any fine having been imposed in Serbia for not notifying a merger. Nevertheless, there have been instances where in the merger control procedure the Competition Commission imposed procedural penalties for failing to deliver the requested data and documents to the Competition Commission.

While the Commission has yet to impose fines for late filing or implementing a merger without clearance, it can be expected that such fines could soon be imposed in Serbia. In January 2016, following the adoption of the new Merger Control Regulation, the Commission once again publicly announced that it will not tolerate late filings and failings to file. In February 2016, an ex officio proceeding was initiated against a banking group for allegedly implementing a concentration (that concerned an asset deal) without a clearance, however, the proceeding was suspended on merits as in the end it was found that the subject transaction did not amount to a concentration.

The Commission may de-merge an already implemented concentration (de-concentration), which can be effected by way of a split-off, sale of shares, cancellation of the agreement or performance of any other action that would lead to the restitution of the status prior to implementation of the concentration. The Commission has not implemented any de-concentrations to date.

The Commission may also impose both behavioural and structural measures on merging entities to alleviate antitrust concerns. In practice, the Commission has used both behavioural and structural measures. Furthermore, special sanctions, such as additional fines or non-registration, might be applicable in certain particular sectors (i.e., banking or telecommunications).

The Serbian Criminal Code contains a wide provision that could be used to interpret a concentration resulting in the creation or strengthening of dominant position as an ‘abuse of monopolistic position'. In this case, the person responsible for intentional implementation of a prohibited concentration could be criminally prosecuted. The maximum sanction is five years' imprisonment; however, this provision has never been used in practice. However, it is important to note that the Serbian parliament has recently adopted amendments to the Criminal Code that are expected to enter into force on 1 March 2018. The new rules only target the conclusion of restrictive agreements (and not abuses of a dominant position) related to price-fixing, limitation of production or sales or market-sharing - meaning that a range of behaviour concerning dominance abuse will be decriminalised.

Judicial review

Resolutions of the Competition Commission are final in administrative proceedings. A party to the proceedings or a third party with a legal interest may challenge the decision before the Administrative Court of Serbia by initiating an administrative dispute through filing a claim within 30 days of receipt of the decision, or within 60 days if the appellant did not receive the decision. The appeal does not preclude the enforcement of the decision. However, the Competition Commission can in certain cases postpone enforcement until the Court ruling upon the reasoned request of the appellant.

The Administrative Court may confirm the decision, annul the decision and return it to the Competition Commission for reconsideration, or decide the case itself. According to the letter of the law, the Administrative Court must decide the administrative dispute within two months of receiving the claim. However, in practice the administrative dispute before the Administrative Court takes much longer than this, and can last even a couple of years.

The Supreme Court of Cassation decides on extraordinary legal remedies against the rulings of the Administrative Court. Such request may only be filed if the Administrative Court has violated the law or procedural rules where this could have affected the outcome of the proceedings.

iv Substantive assessment

When deliberating on the permissibility of a concentration, the Competition Commission particularly considers the following:

  • a the structure of the relevant market;
  • b actual and potential competitors;
  • c the market position of the parties and their economic and financial power;
  • d the possibility to choose suppliers and customers;
  • e legal and other barriers to entry in the relevant market;
  • f the level of competitiveness of parties;
  • g supply and demand trends for relevant goods or services;
  • h technical and economic development trends; and
  • i the interests of consumers.

The Competition Commission applies the SIEC test in combination with the dominance test, based on wording that has been transposed from the EUMR. Most often, the authority will analyse the level of concentration of the market by relying on the Herfindahl-Hirschman Index, and assess the parties' market power based on the market share information.

Despite the SIEC test being an integral part of the assessment toolkit, the Competition Commission in practice initiates Phase II proceedings, discusses remedies and blocks transactions almost exclusively by relying on the dominance test.


i Voluntary notification

Exceptionally, the Competition Commission has the authority to institute an ex officio merger control procedure if an unnotified concentration results in the merged undertakings having a market share above 40 per cent. The 40 per cent market share threshold is not a mandatory jurisdictional threshold (i.e., the parties are not obliged to file a notification with the Competition Commission if their combined market share in any relevant market exceeds 40 per cent).

However, to avoid a situation of an ex post analysis, it may be advisable to notify the Competition Commission of the intended merger if the parties' market shares do exceed this threshold (in Serbia). To our knowledge, the Competition Commission has not initiated any ex officio merger control procedure where a concentration that has not been notified might have resulted in the parties' market share exceeding 40 per cent.

ii Acquisition of minority shareholdings

Similarly to the EU regime, an acquisition of a minority shareholding may trigger the filing requirement provided that the minority shareholder would be able to exercise certain controlling rights that fall outside the scope of ordinary rights attributed to a minority shareholder. However, while the European Commission would normally rely on its own guidelines (the Consolidated Jurisdictional Notice), the Serbian Competition Commission has enacted no such guidelines, but looks at the European Commission's Consolidated Jurisdictional Notice as persuasive authority. Parties normally refer to the Consolidated Jurisdictional Notice, although in certain cases the Competition Commission may use a wider interpretation of control than that found in the European Commission's Notice.

iii Takeovers by a public takeover bid

Regardless of whether the turnover thresholds have been met, all concentrations occurring as a result of a public takeover bid within the meaning of Serbian legislation governing the takeover of joint stock companies must be notified to the Competition Commission.


The merger control regime in Serbia functions relatively well and is relatively straightforward. The Competition Commission has increased its capacity and handles cases in an efficient and fairly consistent manner. Some of its activities have to a certain extent been motivated by public pressure and consumer expectations, but its standard of review is transparent and to a large extent predictable.

Through introduction of the short-form merger notification, Serbian merger rules have been further aligned the EU merger regime. The possibility of such abbreviated merger filings has significantly cut the red tape surrounding the merger filings in Serbia, making the merger control procedure more efficient and less burdensome for the parties. The Competition Commission has increasingly become more lenient towards requiring formalities such as apostilisation or notarisation of documents, especially in foreign-to-foreign filings and tends to adopt a more practical approach.

In the coming period, the Commission is expected to continue with its high level of activities in the field of mergers. In particular, since it has repeatedly publicly emphasised its statutory power to impose fines for late filing or implementing a merger without clearance, such fines can be expected in the coming period. We are also expecting some developments in terms of amendments of the Competition Law in the mid-term (e.g., possibly during the course of 2018) and there have been public considerations of upcoming amendments, however, there have not been any specific changes or draft documents produced by the Competition Commission as of yet. As far as we are aware, the amendments of the law are still being discussed internally (i.e., the possible changes are still in early stages of consideration).


Karanović & Nikolić

Rastko Petaković is a senior partner at Karanović & Nikolić, specialising in M&A, competition law and business regulation. He is also head of the firm's regional competition practice group. He advises clients on the most complex antitrust matters, cross-border transactions and business regulation and is ranked by independent directories as the leading competition and M&A lawyer in the country. Rastko has advised clients on the most complex antitrust investigations and the largest M&A deals in the region to date. He particularly focuses on private equity clients and specialises in telecom and FMCG. Rastko is a member of the Board of Directors of the Serbian Private Equity Association (SPEA) and was selected as a winner of the 2015 European Emerging Leaders Awards by the M&A Advisor.

Bojana miljanović

Karanović & Nikolić

Bojana Miljanović is an independent attorney at law in cooperation with Karanović & Nikolić, and a senior associate in the competition practice group. She has worked on numerous corporate transactions and competition matters involving specialised advice on competition law, namely merger control and antitrust issues. Her focus are clients in FMCG and pharma industries. Bojana is qualified to practise in both Serbia and New York.


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Tel: +381 11 3094 200

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1 Rastko Petaković is a senior partner at Karanović & Nikolić, and Bojana Miljanović is an independent attorney at law in cooperation with Karanović & Nikolić and a senior associate in the competition practice group.