Competition Law under Construction Case of: Serbia and Montenegro

1. Competition Law under ConstructionCase of: Serbia and Montenegro Miloš Andrović Public Policy Manager & Compliance Officer Disclaimer:Statements and positions advocated and presented represent the sole position and responsibility of the speaker

2. Protection of Competition – Understanding the Environment? • Protection of Competitors • Protection of Consumers • Combating organized crime and local tycoons • Tool for driving Government agenda • Source of influencing economic settings • Restriction of competition by Government and state authorities • negative effects on competition and abusing of trade protection instruments

3. Stakeholders Involved – Impeding Development of Effective Competition • Market monopolization and cartelization widespread • Powerless and young authorities • Collective decision-making body vs. individual autonomous authority; • Lack of professionalization by the officials; • Lack of people development, training and management; • No clear enforcement agenda; • Financial dependency and fear of bankruptcy; • Personal dependency and fear of recall; • Lack of transparent, consistent and coherent decision making; • Refusal to act – business preclusion

4. Stakeholders Involved – Impeding Development of Effective Competition Cont’d • No institutionalized cooperation between various authorities dealing with: • Antitrust, Corruption, Public Procurement, sector specific regulators and Prosecution • Prevention of competition often part of prior/parallel criminal act (bribery, abuse of power, conflict of interest) • Current environment on prosecution and penalties • Corruption/Bribery cases – focus on individuals and not undertakings – major loss to society • Competition law cases – focus on undertakings and not individuals – no deterrence effect on individuals and no enforced fines on undertakings

5. Enforcement Problems • No direct and on the spot collection of evidence; • Decisions mainly based on indirect evidence; • Lack of trust by potential leniency applicants; • Unfair trade practice vs. abuse of dominance; • Mergers still in focus (assessment regardless of thresholds on financial markets); • Lack of legal certainty and predictability; • No enforced fines (retroactive application); • Passive enforcement of the Law; • Lack of compliance culture; • Insufficient international cooperation; • Lagging in implementation of soft-law harmonization instruments;

6. milos.androvic@merck.com