SERBIA Trends and Developments Contributed by: Uroš Popović and Tina Petrić, Drašković Popović & Partners
Foundations of the Serbian Merger Control Regime Merger control remains one of the key instruments for safeguarding competition in the Republic of Serbia, reflecting its importance not only across European legal systems but also globally. In an increasingly interconnected and dynamic market environment, the legal framework governing concentrations plays an important role in preserving competitive market structures and ensuring that structural changes in the economy do not result in excessive market power or co-ordinated market behaviour. For undertakings involved in mergers, acquisitions, or other forms of concentrations, Serbian competition law imposes a duty to assess whether a proposed transaction requires notification to the Commission for the Protection of Competition (the Commission). This assessment is not only a procedural formality, but a substantive legal obligation with important implica - tions for the timing and even validity of the transac - tion. The Serbian merger control regime is established under the Law on the Protection of Competition (“Offi - cial Gazette of the RS”, No 51/2009 and 95/2013) (the Law), supplemented by secondary legislation that governs notification requirements and market defini - tion standards. These rules form the basis for evaluating whether a transaction triggers regulatory oversight and how its potential impact on market dynamics will be assessed. While many concentrations proceed without rais - ing substantive concerns, the regime is designed to detect and address transactions that may lead to a significant impediment to effective competition – whether by creating or strengthening a dominant posi - tion or by reducing incentives for independent market behaviour. In this respect, merger control serves not merely as a gatekeeper, but as a strategic instrument for preserving the conditions under which competition can thrive. Given the potential consequences of non-compliance, including financial penalties, procedural delays, and, in some cases, post-closing structural remedies, early and accurate legal analysis is essential. Companies
contemplating transactional activity should incorpo - rate merger control review into their due diligence pro - cess at the earliest possible stage. Overview of the Current Serbian Merger Control System A concentration between undertakings arises in cases of: • mergers and other status changes where a change of control in the concerned undertakings occurs; • acquisition of direct or indirect control over another undertaking or a part thereof that may constitute an independent economic entity; and • joint ventures between two or more undertakings to create a new undertaking or acquire joint control over an existing one, performing on a lasting basis all the functions of an autonomous economic entity. However, the obligation to notify the Commission does not apply to every transaction involving a change of control in undertakings or every company imple - menting such changes. Instead, it arises only when certain statutory requirements are met. In this regard, a concentration must be notified to the Commission if: • the aggregate worldwide annual turnover of all par - ties to the concentration in the preceding financial year exceeds EUR100 million, provided that the turnover of at least one party on the market of the Republic of Serbia exceeds EUR10 million; or • the aggregate domestic annual turnover of at least two parties to the concentration in the preceding financial year exceeds EUR20 million, provided that the turnover of each of at least two parties on the market of the Republic of Serbia exceeds EUR1 million in the same period. Regarding the calculation of the turnover, total income is calculated as the sum of business, financial, and other income. In cases of related entities, the total annual income is calculated as the sum of all total income achieved by market participants who are considered related and belong to the group to which the filing party belongs (acquirer of control). When calculating the total annual
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