The Serbian Commission for Protection of Competition ("CPC") has recently published a report on its sector inquiry in the cement and concrete markets in Serbia, conducted from 2018 to 2021 ("Sector Inquiry"). The CPC aimed to determine the relationships between competitors on both markets, assess their market shares and relative strength, analyse their commercial policies and contractual relations with suppliers and customers, as well as the effects such relations may have on competition.
What did the CPC conclude?
The main conclusions of the Sector Inquiry are:
What does the CPC recommend?
Based on the Sector Inquiry conclusions, the CPC gave the following recommendations to the market participants:
High market shares and oligopolistic market structures are signals of weakened competition. Although this is not a problem per se, caution should be exercised on such markets for at least two reasons: (unintentional) collusive outcomes are more likely than on other markets and different dominance abuse theories, including the one of discrimination, apply. It is highly recommended in such cases to review and if necessary, structure commercial policies in accordance with applicable competition law standards, while due care should be exercised with how the management and employees communicate externally with competitors.
This is of particular importance as it is not uncommon for competition authorities, including the CPC, to follow-up on sector inquiries with formal investigations. The fact that the CPC deemed the Sector Inquiry called for and that potential issues have in fact been recognized could suggest formal investigations should not come as a surprise.