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On 4 July 2024 the Serbian competition regulator – the Commission for Protection of Competition (“CPC”) published its draft proposals of four new regulations on exemption of certain categories of agreements from the prohibition of restrictive agreements (block exemption regulations, “BERs”). The proposed BERs define conditions for the exemption of the following categories of agreements:
- vertical agreements in general (“VBER”),
- agreements on servicing and maintenance of motor vehicles and sale of spare parts for motor vehicles (“MVBER”),
- agreements on transfer of technology (“TTBER”), and
- agreements in the sector of transport by rail and road (“TBER”).
Background
The current Serbian antitrust legal regime relevant for the assessment of restrictive agreements consists most importantly of the Law on Competition Protection from 2009, as amended in 2013, one block exemption regulation on vertical agreements from 2010 and two block exemption regulations on horizontal agreements also from 2010 (on specialization and research & development).
A proposal of a new Law on Competition Protection has been in the pipeline since 2018, with several rounds of public discussions taking place during 2018 and 2019. However, the work on the new law has been stalled in the meantime. The CPC has also proposed new block exemption regulations on agreements in the motor vehicle sector and agreements on technology transfer back in 2017, but this process has not resulted in the adoption of these regulations. An update to the current, 15-year-old,regime has hence been in the works for some time.
The rapid digitalisation and development of e-commerce, as well as important legislative changes in the EU that happened in the meantime, most notably the new Vertical Block Exemption Regulation and the accompanying Vertical Guidelines of the European Commission, obviously motivated the CPC to propose the new BERs.
Harmonization with the EU legal regime
In general, if adopted by the Government, the new BERs should further align the Serbian antitrust regime with the EU one. As acknowledged in the reasoning of each BER draft proposal, each BER is aligned with its corresponding EU counterpart:
- the proposed VBER draft is aligned with the Commission Regulation (EU) 2022/720 of 10 May 2022,
- the proposed MVBER draft is aligned with the Commission Regulation (EU) No 461/2010 of 27 May 2010, as amended by the Commission Regulation (EU) 2023/822 of 17 April 2023,
- the proposed TTBER draft is aligned with the Commission Regulation (EU) No 316/2014 of 21 March 2014, and
- the proposed TBER draft is aligned with Council Regulation (EC) No. 169/2009 of 26 February 2009.
The adoption of the proposed BERs would lead to an amendment of the existing block exemption regime for vertical agreements and an introduction of a completely new block exemption regime for vertical agreements in the motor vehicle sector, agreements in the sector of transport by rail and road and for technology transfer agreements.
If adopted by the Government, market participants will have to align their agreements with the new BERs within six months following their entry into force.
Some important differences between the Serbian antitrust regime and the EU one would however still remain in place, such as the formal mandatory individual exemption requirement for agreements not covered by any of the BERs (instead of the self-assessment regime applicable in the EU), a lack of block exemption regimes and specific rules for agreements in the insurance, telecommunication and postal sectors as well as a lack of a settlement procedure.
Major novelties concerning vertical agreements
The proposed new VBER brings the following important novelties:
- adjustment of active and passive sales definitions, by inclusion of types of on-line sales and activities in the definition of active sales and sales resulting from participating in public procurement or responding to private invitations to tender in the definition of passive sales;
- definition and inclusion of online intermediation services in the scope of the VBER;
- new rules concerning the application of VBER to situations of dual distribution, introducing specifically the conditions under which information exchanges between the supplier and buyer in the context of dual distribution can be block exempted;
- new rule according to which the application of the VBER is excluded with respect to vertical agreements relating to the provision of online intermediation services where the provider of the online intermediation services is also a competing undertaking on the relevant market for the sale of the intermediated goods or services;
- new rule according to which the VBER shall continue to apply for two years after the market share of a party to a vertical agreement during the agreement’s implementation has exceeded the relevant 25% threshold for not more than 5%;
- introduction of the possibility of a so called “shared exclusivity” involving up to three exclusive distributors per exclusively allocated territory or customer group;
- important clarifications of the scope of active and/or passive sales restrictions in the context of exclusive and selective distribution;
- introduction of a new hard-core restraint consisting of restriction of effective use of the internet by the buyer or its customers to sell contract goods or services to particular territories or customers;
- introduction of a new ground for exclusion of the VBER’s application in cases of retail parity obligations causing buyers of online intermediation services not to offer, sell or resell goods or services to end users under more favourable conditions via competing online intermediation services.
Expectations
We expect that among proposed BERs the proposed VBER would probably be of the greatest interest for the majority of market participants. From our experience, new rules concerning specifically on-line sales, intermediation services, dual distribution and information exchanges in the context of dual distribution would most likely be of greatest relevance. The application of those rules to IT systems in use by the market participants, different information flows between suppliers and buyers, market sounding and monitoring practices etc., should be closely considered.
If you are interested to learn more about the proposed BERs feel free to contact our antitrust experts.
