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In the last four months of 2022, the Serbian Commission for Protection of Competition ("CPC") initiated five investigations for suspected competition infringements. The beginning of 2023 shows that the CPC's intensive work on detecting competition infringements is not of a passing nature, but is here to stay – the CPC started the year off with yet another investigation for suspected resale price maintenance (RPM) against a heating products company Vaillant.
Recap of the investigation
The CPC became aware of the possible infringement in the form of RPM by reviewing the products’ prices on the websites of Vaillant and its authorized distributors (ie, retailers).
When comparing the retail prices of the Vaillant brand gas boilers during the observed period, the CPC discovered that their prices were almost identical across the board with the price difference (where it existed) of less than one Serbian dinar.
The CPC reviewed Vaillant’s website too, where it found a January 2023 price list which contained wholesale and retail prices of the Vaillant products. Retail prices from Vaillant’s price list matched those of the authorized distributors. The CPC noted that Vaillant is not active at the retail level, implying that retail prices from Vaillant’s price list could only be aimed at RPM.
The CPC ran the same investigation for Vaillant’s second brand – Protherm, where it noticed similar practices.
Lessons to be learned
Since 2020, the CPC has initiated five investigations for suspected RPM based on searches of price data available on the parties’ websites (proceedings against Comtrade, Roaming, SF1 Coffee, Apcom and Vaillant). This points to a worrying level of the market participants’ unfamiliarity with the most flagrant competition law infringement.
As a reminder, the CPC may impose a fine of up to 10% of the infringing party’s annual turnover generated in Serbia. The CPC also seems to be gradually increasing fines in RPM cases. For example, in SF1 Coffee case, the CPC imposed the highest penalty in the last ten years in terms of percentage for RPM (2% of SF1 Coffee’s annual Serbian turnover).
The CPC’s continuous heightened activity implores companies in Serbia to devote themselves to harmonizing their businesses with competition rules. An internal audit of the company’s operations by checking its contracts and communications with suppliers and buyers is always a good way to start. This should be followed by regular compliance training programs that raise awareness of the importance of competition rules in everyday business operations.
