The rules governing merger control in Montenegro are laid down by the Protection of Competition Act (Zakon o zaštiti konkurencije) (Official Gazette of Montenegro, Nos 44/2012, 013/18 and 145/2021) (the “Competition Act”).

In addition to the Competition Act, detailed rules applicable to merger control are regulated by the following bylaws:

• the Guidelines on the Content and Method for Submission of Merger Notification (Uputstvo o sadržaju i načinu podnošenja zahtjeva za izdavanje odobrenja za sprovođenje koncentracije) (Official Gazette of Montenegro, No 18/2023) (the “Merger Notification Guidelines”);
• the Rulebook on the Method and Criteria for Determining the Relevant Market (Pravilnik o načinu i kriterijumima utvrđivanja relevantnog tržišta) (Official Gazette of Montenegro, No 18/2023) (the “Rulebook on the Relevant Market”);
• the Notice on the Protection of Confidential Business Information in Proceedings Before the Agency for Protection of Competition, dated 30 September 2014 (Obavještenje o zaštiti povjerljivih poslovnih podataka u postupku pred Agencijom za zaštitu konkurencije) (the “Notice on the Protection of Confidential Information”); and
• the Tariff on the Amount of Payable Fees in the Proceedings Before the Agency for Protection of Competition (Tarifnik o visini naknada koje se plaćaju u postupku pred Agencijom za zaštitu konkurencije) (Official Gazette of Montenegro, No 14/2013) (the “Tariff”).

The Competition Act is largely aligned with EU merger control legislation but addresses many issues only in broad terms, lacking detailed regulation. While EU merger control rules do not directly apply in Montenegro, the Agency for Protection of Competition (the “Agency”) relies on EU regulations, guidelines and case law to interpret the Competition Act, including, for merger control purposes, the Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings (the “Jurisdictional Notice”). Parties are encouraged to reference relevant EU provisions and precedents to support their arguments in proceedings before the Agency.

The Competition Act is applicable to mergers regardless of the sector. However, additional specific sectoral regulations govern mergers within certain industries, as outlined below.

• Banking: any acquisition of a qualified shareholding in a credit institution – defined as a direct or indirect investment of at least 10% of capital or voting rights, or any investment granting significant influence over management, or any increase in an existing qualifying shareholding that would raise it to or above 20%, 33%, or 50% ‒ requires prior authorisation from the Central Bank of Montenegro;
• Investment funds: any person intending to acquire a qualified participation in an investment fund management company is required to obtain the consent from the Capital Markets Commission for such acquisition. Furthermore, any person already holding a qualified participation who intends to increase their stake in the capital or voting rights of the management company to reach or exceed 10%, 20%, 30% or 50% is also obligated to secure the Commission’s approval for such an increase.
• Insurance: any acquisition of a qualified shareholding, defined as sole or joint, direct or indirect investment of at least 10% of capital or voting rights, or any investment granting significant influence over management or any increase in the existing qualifying shareholding that would raise it to or above 20%, 30% or 50%, in a Montenegrin insurance company must be pre-approved by the Insurance Supervision Agency.
• Telecommunications: the Agency for Electronic Communications and Postal Services is competent to provide an opinion to the Agency regarding the assessment of concentrations or other forms of joint or co-ordinated actions by operators. As a competition protection measure, the Agency for Electronic Communications and Postal Services may also prescribe conditions prohibiting the transfer of radio frequency usage rights or establish conditions for transfers that are not subject to concentration assessment under competition protection regulations if such a transfer could significantly distort market competition.

As mentioned at 1.1. Merger Control Legislation, the Agency (Agencija za zaštitu konkurencije Crne Gore) is responsible for the enforcement of the Competition Act.

Depending on the sector in which the relevant merger occurs, the Agency may engage other regulatory authorities in the review process, such as the Central Bank of Montenegro, the Agency for Electronic Communications and Postal Services and the Insurance Supervision Agency.

Notification to the Agency is compulsory if the transaction meets the turnover thresholds (as outlined in 2.5 Jurisdictional Thresholds). There are no exceptions to the compulsory notification, regardless of the local nexus.

The Agency may, upon learning of an implemented concentration, require the concentration participants to notify the concentration, regardless of their turnovers, if their combined market share on the relevant market in Montenegro exceeds 60%. The burden of proving the percentage of the joint market share of the concentration participants lies with the Agency.

A fine for failure to notify a concentration is prescribed in the amount of 1% to 10% of the turnover generated in the year preceding the year when the infringement occurred. The law does not specify whether the fine percentage is based on global or national turnover, but in practice the court has calculated fines based on the turnover generated by the acquirer in Montenegro. There have been precedents where, if the acquirer is a foreign company, the Agency initiates misdemeanour proceedings for both late filing and gun-jumping against its related entity in Montenegro, regardless of its role in the concentration (see 10.2 Recent Enforcement Record).

The Agency may not impose a fine for a failure to notify independently, it may only initiate misdemeanour proceedings. In practice, the misdemeanour proceedings last for more than a year. The fines have been few and imposed at the lowest end of the prescribed range.

If a legal entity is fined for gun-jumping, the responsible person within the entity shall be automatically fined between EUR1,000 and EUR4,000.

If the competition authority subsequently prohibits the transaction, it can impose divestment or other appropriate measures. There is no criminal liability for the breach.

The decisions of the Agency on finding the infringement of competition and imposing any measures are published on the Agency’s website. However, the Agency publishes only the executive part of the decision, without the reasoning. The decisions of misdemeanour courts in which the monetary penalties are imposed are published on the website of the court, however, with a considerable delay.

The concentration of market participants is considered to be:

• the merger of two or more independent undertakings or their parts;
• when one or more undertakings or individuals, who already control at least one undertaking, gain direct or indirect control over another undertaking or its part (with two or more transactions taking place between the same undertakings within a period of up to two years being treated as a single concentration); or
• when two or more independent undertakings establish a new undertaking or jointly acquire control over an existing undertaking, provided that this entity operates independently on a long-term basis and performs all the functions of an independent market participant (joint ventures).

An acquisition of control is not regarded as a concentration in the following cases.

• When a bank or other financial institution temporarily acquires shares or securities of an undertaking with the intent to resell them, provided that the resale occurs within 12 months of acquisition. During this holding period, the acquirer must not exercise ownership rights in a way that would influence the undertaking’s business decisions, particularly regarding its behaviour toward competitors, and should only hold the shares for the purpose of preparing for the sale of the securities or assets in the market. The Agency may extend the 12-month period by an additional six months at the request of a financial institution, provided the institution demonstrates that the sale of the securities was not possible within the original 12-month period.
• When control is acquired by an individual acting in the capacity of a bankruptcy or liquidation administrator, as prescribed by the applicable bankruptcy or liquidation laws.
• When a joint venture is established with the objective of co-ordinating market activities between two or more undertakings that maintain their independence. In such cases, the joint venture will be evaluated under the rules governing restrictive agreements.

Internal restructurings or reorganisations are not caught by the merger control provisions. On the other hand, operations not involving the transfer of shares or assets may be considered a concentration and caught by the merger control provisions if such operations lead to de facto acquisition of direct or indirect control over an independent undertaking or a part thereof.

In order to constitute a concentration, a transaction must lead to a change of control over an undertaking or a part of an undertaking. The Competition Act defines control as a situation where one undertaking has:

• more than half of the shares or stakes in another undertaking; or
• more than half of the voting rights; or
• the right to appoint the majority of members of the management board or persons authorised to represent the company in accordance with the law; or
• a decisive influence on the management and business operations of the company.

An acquisition of a minority or other interest may be caught under the merger control provisions if such acquisition alone or in combination with other factors provides the acquirer with the possibility to exercise decisive influence on the management and business operations of the company.

The Agency must be notified of a concentration if:

• the combined total annual revenue of at least two concentration participants exceeded EUR5 million in the Montenegrin market during the previous financial year; or
• the combined total worldwide annual revenue of the concentration participants exceeded EUR20 million in the previous financial year, with at least one of the concentration participants parties generating EUR1 million in the market in Montenegro during that same period.

The intra-group revenues are not taken into account in the calculation of the turnover thresholds.

Turnovers are calculated based on the total revenue from the sale of goods or services generated in the year preceding the year in which the concentration is notified. For domestic turnover, export values must be excluded. Sales recorded in foreign currencies must be converted to euros using the average exchange rate of the Central Bank of Montenegro as of the last day of the relevant year.

Foreign-to-foreign transactions are reviewed by the Agency as long as the turnover thresholds are met, with no requirement for a local nexus for the Agency to assess the transaction on its merits.

The Competition Act sets out specific rules for calculating the turnover applicable to banks, insurance companies and other financial institutions.

In the case of an acquisition of sole control, the turnover calculation should include the total revenue of the acquirer’s group, while only the target’s total revenue is considered from the seller’s side.

In a merger, the calculation encompasses the consolidated group turnover of all merging entities. For joint ventures, the total group revenue of both partners is included, and if the joint venture involves an existing company, its turnover is also required. If control is acquired over only part of a company, only the revenue attributable to that specific part is considered.

Montenegrin legislation does not address whether the changes in the business during the reference period should be reflected in the turnover calculation. However, considering that the Agency relies on the EU legislation, including the Jurisdictional Notice, the notifying party should adjust the turnover in line with the provisions on the adjustments after the date of the last audited accounts to take into account the changes in the business and therefore the economic reality of the parties’ economic strength.

Foreign-to-foreign transactions are subject to Montenegro’s merger control regime if they meet the specified turnover thresholds, regardless of whether the transaction has local effects. The Agency has not adopted the local nexus doctrine, and no local presence is required, as the thresholds can be met through sales made by the parties via local distributors.

A filing may be required even if only one party to the concentration exceeds the thresholds. As a result, notifications may be triggered even when the target has no sales or assets in Montenegro, based solely on the acquirer’s revenues. In 2023, only about 6.5% of all cleared concentrations were implemented in Montenegro, with the remainder involving foreign-to-foreign transactions.

There are no market share-based thresholds in Montenegro.

Joint ventures are subject to merger control provided that they constitute a “full-function” joint venture. This means the joint venture must operate independently on a long-term basis and perform all the functions of an autonomous economic entity, such as having its own management, resources and financial independence to carry out its business activities on the market. A joint venture that is merely auxiliary to its parent companies or lacks the capability to operate independently will not fall under the scope of merger control but may instead be assessed under rules governing restrictive agreements. Please see 2.5 Jurisdictional Thresholds for the rules on calculating the revenues in the context of joint ventures for jurisdictional assessment purposes.

Transactions are subject to the Agency’s merger control regime only if they meet the turnover thresholds outlined in 2.5 Jurisdictional Thresholds.

As previously indicated in 2.1 Notification, the Competition Act grants the Agency the authority to require the parties to notify an already closed transaction that does not meet the turnover thresholds if their market share of the parties in a relevant market in Montenegro exceeds 60%.

A procedure to establish a violation of the Competition Act cannot be initiated if more than two years have passed since the violation occurred, with an absolute statute of limitations of four years from the date of the violation.

The implementation of a transaction cannot proceed until the merger approval is obtained or the statutory deadlines for the Agency’s decision-making have expired. An exception to this rule applies in the case of a public sale conducted in accordance with the law (see 2.14 Exceptions to Suspensive Effect).

For multi-step transactions, the Competition Act stipulates that two or more transactions (eg, acquisition of shares or stakes) between the same undertakings, conducted within a period of less than two years, shall be treated as a single concentration. In such cases, clearance for the concentration must be obtained before implementing the first transaction.

If a party closes a transaction without prior notification or in violation of the standstill obligation, it may be fined between 1% and 10% of its turnover generated in the year preceding the infringement. While the law does not explicitly specify whether the fine is calculated based on worldwide or national turnover, in practice, courts have determined fines using the turnover generated in Montenegro. Additionally, if a legal entity is penalised for gun-jumping, the responsible individual within the entity will also be fined, with amounts ranging from EUR1,000 to EUR4,000.

The Agency does not have the authority to impose fines for gun-jumping but may initiate misdemeanour proceedings, which are then conducted by competent misdemeanour courts. These courts handle their own proceedings and impose fines. However, this enforcement system has proven largely ineffective. As a result, the new Competition Act, currently in development, is expected to transfer the power to impose fines directly to the Agency (see 10.1 Recent Changes or Impending Legislation).

In practice, misdemeanour proceedings often take more than a year to conclude. Fines have been rare and are typically imposed at the lowest end of the prescribed range, sometimes even below the minimum, as permitted by the Misdemeanour Act in cases of mitigating circumstances. Notably, fines have also been imposed in instances of foreign-to-foreign transactions.

Decisions of misdemeanour courts are generally published on the courts’ web pages, with the parties’ identities protected (using initials instead). However, in practice, these decisions are often published with significant delays and inconsistently, with some misdemeanour courts failing to make any decisions publicly available.

If the competition authority subsequently prohibits a transaction, it can impose divestment or other appropriate measures. There is no criminal liability for such breaches.       

Under the Competition Act, a takeover bid may proceed before the clearance decision is issued, provided the concentration is promptly notified to the Agency. However, during this interim period, the acquirer is prohibited from exercising the voting rights attached to the acquired securities.

The Competition Act does not permit the closing of a transaction before its clearance by the Agency, except in the limited circumstances outlined in 2.14 Exceptions to Suspensive Effect. Additionally, the Act does not provide for a carve-out mechanism, meaning the Agency does not allow a transaction to be implemented in other jurisdictions while its approval is still pending in Montenegro.

A concentration must be notified to the Agency within 15 days of the earliest occurrence of any of the following events:

• the conclusion of an agreement;
• the publication of a public bid, offer or the closing of the bid; or
• the acquisition of control.

Failure to notify a concentration within the prescribed 15-day deadline (ie, late notification) may result in fines under the Competition Act. Legal entities can be fined between EUR4,000 and EUR40,000, while responsible individuals within the entity can face fines ranging from EUR1,000 to EUR4,000.

The Agency can impose a misdemeanour fine for late filing if it is limited to the legally prescribed minimum (EUR4,000 for the undertaking and EUR1,000 for the responsible person). For higher fines, the Agency must initiate misdemeanour proceedings before the competent misdemeanour court. Minimum fines imposed by the Agency can be contested by the fined party before the misdemeanour court.

Decisions of misdemeanour courts are generally published on the courts’ websites, with the identities of the parties protected (using initials). However, in practice, the publication of decisions is often delayed and inconsistent, with some misdemeanour courts failing to publish any decisions at all.

Notification may also be submitted before the conclusion of a binding agreement on the basis of a serious intent of the parties to enter into such an agreement. This serious intent must be demonstrated in a written form, such as a letter of intent or memorandum of understanding, which must be signed by all concentration participants.

If a concentration is cleared in summary proceedings and unconditionally (Phase I), the filing fee is 0.03% of the combined annual turnover of the concentration participants in the financial year preceding the concentration, capped at EUR15,000.

If the concentration is cleared following an investigation and/or subject to conditions (Phase II), the filing fee is 0.07% of the combined annual turnover of the concentration participants in the financial year preceding the concentration, capped at EUR20,000.

Upon submission of a notification, the notifying party is required to pay the initial portion of the fee, amounting to EUR600. The remaining balance of the fee, determined by whether the concentration is cleared in Phase I or Phase II, must be paid before the issuance of the clearance decision. The Agency issues a payment notice to the notifying party for this purpose.

While there are no prescribed deadlines for either part of the fee, the Agency will not commence the review process or issue the clearance decision until the respective fee is paid.

In the case of an acquisition of sole control, the acquirer is solely responsible for notifying the concentration. For the acquisition of joint control, all parties acquiring control share the responsibility for submitting the notification. In the case of a merger, both merging parties are required to file the notification.

The scope of information and documents required for a notification depends on whether it is submitted as a short-form or full-form notification (see 3.11 Accelerated Procedure for the conditions for short-form notification). The list of required items is extensive, and the authority adopts a formalistic approach, requiring all specified documents and information to be provided, irrespective of the concentration’s local effects or the relevance of the information to the substantive assessment.

The required documents include the transaction document, registry excerpts, group charts and financial statements of competition participants for the three years preceding the filing year. The required information encompasses detailed data about the parties to the concentration, including, but not limited to, the number of the employees, top customers and suppliers, distribution and/or sales networks. Additionally, it must include the structure and the rationale for the concentration, as well as comprehensive information on the relevant markets, including the market shares of the parties and their competitors.

The filing must be submitted in Montenegrin, both in hard-copy and electronic form. All schedules in a foreign language must be translated into Montenegrin by a court-certified translator.

Strict formal requirements apply to certain documents submitted with the notification. Registry excerpts (for the parties to the concentration and their related entities holding at least 25% of shares or exerting dominant influence over their management), powers of attorney, and the concentration act must be provided in their original form or as notarised copies. Additionally, these documents must be apostilled unless a bilateral agreement between Montenegro and the country of origin waives the legalisation requirement for official documents.

If the notification is deemed incomplete, the Agency will issue a request for additional information and/or documents, setting a deadline of no less than three days and no more than 30 days from the date of receipt of the request.

Failure to comply with the Agency’s request may result in a periodic penalty ranging from EUR500 to EUR5,000 per day, up to a maximum of 3% of the total revenue generated in the financial year preceding the year in which the proceedings were initiated.

If a party submits inaccurate or misleading information in the filing, the penalty is the same as for non-compliance with the Agency’s request for additional information, as outlined in 3.6 Penalties/Consequences of Incomplete Notification. Also, the Agency may revoke its approval of a concentration if the decision was based on incorrect or false information.

The Competition Act does not explicitly distinguish between Phase I and Phase II proceedings. The Agency has 105 days from the submission of a complete notification to clear the transaction unconditionally, 125 days to issue a conditional approval, and 130 days to issue a decision prohibiting the concentration.

The Agency may request additional information at any point before granting clearance. Each request for information resets the timeline, with a new deadline starting from the day when the notifying party responds to the request. Therefore, parties can be certain that the concentration will only be cleared by virtue of law after 130 business days have passed from the submission of a complete notification. Considering that the Agency does not issue a certificate of completeness, this deadline can become a moving target.

In practice, the Agency typically takes two to three months to issue a clearance decision for non-issue concentrations.

Pre-notification discussions with the Agency are not regulated and the Agency does not practice them. It is not prohibited to request a meeting with the authority to discuss certain important issues or concerns before submitting the notification, but the Agency in general prefers to act on a submitted notification, considering that the deadlines provide for sufficient time for review.

Requests for information during the review process are frequent. In practice, at least one request for information is typically issued for non-issue concentrations, while two or three requests are common in cases involving horizontal overlaps or vertical issues on the relevant market. The requests can be burdensome for the parties, as the Agency often demands information outlined in the Merger Notification Guidelines, even in cases when such information is irrelevant to the assessment of the notification or unrelated to the relevant markets.

As detailed in 3.8 Review Process, each request for information resets the review timeline, with the new deadline starting from the day when the notifying party responds to the request.

There are two types of notifications in terms of the extent of requested information and documents: full-form and short-form notifications. A short-form notification may be submitted when at least one of the following conditions is met:

• the combined market share of the undertakings concerned on the relevant market is less than 10%, and/or less than 15% on a vertically integrated market;
• an undertaking acquires sole control over an undertaking in which it previously held joint control; or
• the undertakings concerned are not active on the same relevant product market, vertically integrated markets, or closely connected markets, whether in or outside Montenegro.

There is no fast-track or any other type of accelerated review procedure; the deadlines outlined in 3.8 Review Process apply to both short-form and full-form notifications. However, in practice, short-form notifications are typically cleared faster, often within two months of submission.

The substantive test for assessing concentrations focuses on whether the transaction significantly prevents, restricts or distorts effective competition in the relevant market, particularly by creating or strengthening a dominant position. This test aligns with the “significant impediment to effective competition” (SIEC) standard applied by the European Commission.

Concentrations meeting these criteria are prohibited unless the parties can demonstrate that the transaction provides consumer benefits that outweigh the negative effects of the dominant position.

The Agency’s analysis involves a comprehensive evaluation of multiple criteria, including:

• the structure and concentration of the relevant market;
• the presence of actual and potential competitors;
• the market positions and economic strength of the parties involved; and
• the ability of suppliers and customers to switch.

Additionally, the assessment considers:

• legal and other barriers to market entry;
• the level of domestic and international competitiveness of the parties;
• trends in supply and demand for the relevant goods or services;
• technological and economic advancements; and
• consumer interests.

Guidelines for defining relevant markets in a concentration are outlined in the Rulebook on the  Relevant Market. To define the relevant market, the Agency applies the criteria of demand substitutability for the relevant product, as well as supply substitutability, depending on the assessed competitive conditions. This includes consideration of the existence and level of development of potential competitors and barriers to market entry.

While the Agency reviews the market definition proposed by the notifying parties, it is not bound by their suggestion. The Agency relies on its own precedents and the European Commission’s decisional practice. Notifying parties are advised to support their market definition proposals with relevant precedents from EU case law.

In practice, the Agency primarily focuses on markets where both parties to a concentration are active, particularly those involving horizontal overlaps. There is no de minimis threshold, and the Agency also evaluates markets where the parties are active at different levels of the supply chain to assess any potential competitive impact on vertically related markets.

In concentrations where the parties’ activities do not overlap and there are no vertically affected markets, the Agency typically analyses the relevant market based on where the target is active. If there are no competitive concerns because the parties are not present in the relevant market, the Agency generally leaves the market definition open.

The Agency relies on its own decisional practice, which is mostly not publicly available, as the explanatory parts of merger decisions are not published. In addition, the Agency also draws on the European Commission’s case law.

The Agency assesses whether to approve a concentration by evaluating its impact on preventing, restricting or distorting effective competition in the Montenegrin market, with a particular focus on the creation or strengthening of a dominant position, using the criteria outlined in 4.1 Substantive Test.

The Agency primarily investigates the effects on horizontally affected markets, concentrating on unilateral effects, especially in cases where there is a significant increase in market share or the elimination of a close competitor. In cases where the parties are active on different levels of the supply chain in related markets, the Agency will investigate potential foreclosure effects. Conversely, the Agency rarely focuses on co-ordinated effects, conglomerate or portfolio effects, elimination of potential competition, or concerns related to innovation.

The Agency considers the economic efficiencies of a concentration put forward by the parties in the notification, particularly if these efficiencies benefit consumers. However, this is not frequently presented by the parties, and there are no publicly available decisions in which the Agency has analysed the economic efficiencies resulting from a merger.

The Agency does not, and is not mandated to, take non-competition concerns into account when reviewing concentrations.

Montenegro has not yet introduced separate rules for the notification of foreign direct investments.

The substantive review of full-function joint ventures is conducted based on the same substantive test outlined in section 4.1 Substantive Test. The Agency may also consider any spill-over effects on the activities of the parent companies outside of the joint venture, and any potential co-ordination issues between the parents would be examined under the rules on restrictive agreements.

The Agency may prohibit a transaction if, based on the assessment criteria outlined in 4.4 Competition Concerns, it determines that the concentration would significantly restrict, distort or prevent effective market competition in the relevant market, particularly through the creation of a dominant position or the strengthening of an existing one.

The Agency may also issue a conditional approval of a concentration. If it determines that the concentration would prevent, restrict or distort competition, it will issue a statement of objections to inform the parties about the established facts, circumstances and conclusions reached during the investigation. The notifying party may propose measures to address the concerns raised by the Agency. The Agency may accept or amend the proposed measures, ordering their implementation, setting deadlines, and defining monitoring methods. If the parties fail to comply with the imposed remedies, the Agency will revoke the conditional approval of the concentration.

Additionally, if a concentration is implemented without, or in violation of, the Agency’s decision, the Agency may require the parties to dissolve the concentration to restore market conditions to their state prior to implementation. To achieve this, the Agency may order the divestment of shares, the limitation or prohibition of voting rights, or the termination of control over the acquired target by other means.

The parties may propose and negotiate remedies to address any competition concerns raised by the transaction (see 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions). Remedies can be proposed in response to the statement of objections but may also be submitted earlier in the process if the parties anticipate specific competition concerns that could be raised by the Agency.

In practice, the Agency typically imposes soft behavioural measures, such as reporting obligations (eg, notifying the Agency of changes in processes, commercial conditions, concluded contracts or offers), obligations to conclude contracts with suppliers and/or customers, and similar measures.

The Agency does not consider non-competition concerns and, as a result, has not imposed any measures related to such concerns.

There is no strict legal standard for acceptable remedies under the Competition Act. However, based on the Agency’s practice, remedies must be proportionate and directly address the identified competition concerns. Remedies should aim to resolve antitrust issues without exceeding what is necessary.

Measures may be aimed at correcting or preventing competition violations, and can be either behavioural (requiring or prohibiting specific actions) or structural (such as the divestment of assets or the termination of joint ventures). Structural measures are imposed only when behavioural remedies are deemed insufficient, excessively burdensome, or if previously imposed behavioural measures were not fully implemented.

During the procedure, and no later than 30 days after receiving the statement of objections, the notifying party may propose measures, conditions and deadlines to the Agency to address the negative effects of the concentration on the relevant market.

If the Agency finds the proposed measures, conditions and deadlines sufficient to restore effective competition in the market, it may issue a decision mandating the implementation of these measures along with the terms and deadlines for their enforcement.

Although the Competition Act suggests that remedies can only be proposed after the Agency issues a statement of objections, in practice, remedies can be offered from the outset of the merger control process, even before an investigation (Phase II) is initiated.

The Agency cannot propose or impose remedies that were not suggested by the notifying party.

The Competition Act explicitly allows the Agency to impose measures to be complied with either before or after the implementation of the concentration. Therefore, the specific deadline for the implementation of each remedy is set out in the clearance decision. If the parties fail to comply with the measures, the Agency has the authority to revoke its decision.

Failure to comply with the agreed-upon remedies may result in fines for the violating undertaking, ranging from 1% to 10% of its total annual turnover from the financial year preceding the violation. Additionally, responsible individuals within the undertaking may be fined between EUR1,000 and EUR4,000.

The Agency issues a formal decision to the notifying party either approving or prohibiting a transaction. It publishes only the operative part of the decision, which includes the dispositive of the decision and any imposed measures, on its official website. The explanatory part of the decision is not publicly available.

Prohibitions and conditional approvals of concentrations are rare in the Agency’s decisional practice. The low notification thresholds result in a significant number of foreign-to-foreign transactions being notified to the Agency. These transactions are assessed irrespective of the presence or absence of local effects. However, as they generally do not raise competition concerns, foreign-to-foreign transactions are typically cleared unconditionally in summary proceedings.

Neither the Competition Act nor its accompanying bylaws explicitly regulate ancillary restraints. Nevertheless, the Agency evaluates ancillary restraints following the principles set out in the European Commission’s Ancillary Restraints Notice. Ancillary restraints that meet the criteria established in the Notice are considered part of the transaction and are covered by the Agency’s clearance decision.

Third parties, including persons submitting initiatives to the Agency, providing information and documents, or any other interested parties or organisations, do not have the status of a party to the proceedings before the Agency nor are they formally involved in the review process. However, there are several ways in which third parties may influence the procedures before the Agency.

Any person may submit an initiative to the Agency to investigate a potential infringement of competition. In its merger review process, the Agency publishes a notice for each notified concentration, which includes the names of the parties, their related entities in Montenegro, and a brief description of the concentration. Third parties may submit concerns regarding a notified concentration. When the Agency opens an investigation and conducts a full review of a notified concentration, it invites all interested parties to provide information and suggestions and may also send questionnaires directly to competitors or other undertakings in related or vertically integrated markets. Undertakings and other legal or natural persons are required, at the Agency’s request, to provide data and documentation relevant to establishing facts in the proceedings within a period of no less than three days and no more than 30 days from the date of receipt of the request.

The Agency may, upon request, send a non-confidential version of the statement of objections to the person or entity that submitted the initiative, along with an instruction granting the initiator the right to submit written objections to the Agency within eight days of receiving the notice. Additionally, upon request, the Agency may provide the statement of objections to any other third party able to demonstrate that the proceedings involve decisions affecting their rights or legal interests.

During the investigative phase of more complex reviews, the Agency seeks input from third parties, typically by issuing written requests for information. Market testing of remedies proposed by the parties is uncommon.

During the merger review process, the Agency publishes a notice in the Official Gazette of Montenegro for each notified concentration, which includes the names of the parties, their related entities in Montenegro, and a brief description of the concentration.

A party providing commercially sensitive information may request confidentiality from the Agency, which can be granted if the request is justified and the need for protection outweighs the public’s right to access the data. The requesting party must demonstrate the potential harm that could result from disclosing the information or its source. The process for safeguarding sensitive information is outlined in the Notice on Protection of Confidential Data.

The Agency is a member of the International Competition Network. It actively participates in Regional Cooperation Council projects and has signed memoranda of understanding with Bosnia and Herzegovina, Croatia, North Macedonia and Serbia to enhance regional co-operation and align with European competition standards. Additionally, the Agency collaborates with the Energy Community Secretariat, UNCTAD, the OECD and the EBRD through various co-operation agreements and initiatives, including the Sofia Statement, which promotes deeper regional co-operation.

Bilaterally, the Agency has bilateral memoranda of understanding with national competition authorities in Albania, Austria, Bosnia and Herzegovina, Bulgaria, Croatia, North Macedonia, Hungary, Germany, Serbia and Turkey. It co-operates most closely with national competition authorities from the region and closely monitors the transactions which they clear in order to detect gun-jumping.

Merger control decisions issued by the Agency can be challenged before the Administrative Court of Montenegro. While the Competition Act does not explicitly define the categories of individuals or entities eligible to appeal such decisions, the right to appeal is governed by the Administrative Disputes Act (Official Gazette of Montenegro, No 54/16). Decisions of the Administrative Court may be further challenged before the Supreme Court of Montenegro at third instance.

On the other hand, as outlined in 2.13 Penalties for the Implementation of a Transaction Before Clearance, the Agency does not have the authority to impose fines and must initiate misdemeanour proceedings. Decisions of misdemeanour courts can be challenged before higher misdemeanour courts in accordance with the Misdemeanours Act. Final decisions of higher misdemeanour courts may only be appealed to the Constitutional Court of Montenegro.

Appeals to the Administrative Court of Montenegro must be filed within 30 days from the date the decision is received. Successful appeals before the Administrative Court are rare in practice. In its review, the Administrative Court focuses on procedural matters, and no decisions have been issued in which it provided a different interpretation of substantive competition law compared to the Agency.

Third parties whose rights or legal interests have been infringed upon by the clearance decision have the right to lodge an appeal in an administrative dispute.

In a noteworthy 2017 decision, the Supreme Court confirmed the legal standing of competitors to challenge merger decisions as third parties. The Administrative Court of Montenegro had previously rejected lawsuits filed by market competitors challenging the Agency’s decision to approve a concentration. The Court reasoned that the Agency’s decision only affected the entities seeking approval, not their competitors, and thus lacked legal impact on them. The Supreme Court overturned this ruling, finding that undertakings on the relevant market have a legal interest in initiating such proceedings. This established a precedent that allows market participants to challenge the Agency’s decisions concerning other undertakings in the market.

There are no separate filing requirements for transactions involving direct investments or foreign subsidies beyond those outlined in the merger control regulations.

There have been no recent changes to merger control legislation. However, a new Competition Act is expected to be adopted in 2025. While the draft of the new Act is not publicly available, the most notable anticipated change is that the Agency will gain the authority to impose fines for competition infringements. Regarding merger control, it is expected that the notification thresholds will be amended to exclude concentrations with minimal or no effect on the local market in Montenegro.

In the last few years, the Agency has become increasingly proactive in scrutinising gun-jumping, ie, concentrations that have been implemented without prior approval from the Agency. While the Agency rarely initiates gun-jumping proceedings in cases where transactions were not notified at all, most cases involved transactions that were notified but implemented before clearance was granted. A concerning trend has emerged, where the Agency initiates misdemeanour proceedings for gun-jumping with respect to foreign-to-foreign transactions, targeting local companies that are related entities of the acquirer. In most of these cases, the local entities are not direct subsidiaries of the acquirer and typically have no knowledge of the transaction. Furthermore, when local entities are fined, their executive directors are also automatically fined for misdemeanours.

There have been no prohibitions of concentrations, with most being cleared in summary proceedings. A small number of cases have seen the Agency accept commitments from the parties, typically involving transactions where either the target or both the acquirer and target are local entities, and the transaction led to high combined market shares in the overlapping markets. In all these cases, the Agency has accepted behavioural commitments.

Recently, the Agency has increasingly focused on addressing restrictive agreements in the Montenegrin market, particularly concerted practices. Additionally, it has been regularly initiating misdemeanour proceedings for gun-jumping, including cases involving foreign-to-foreign transactions where proceedings were brought against the local related entities of the acquirer.

Industry-wise, the Agency’s attention has centred on the telecoms, petrol and retail markets, with the latter being continuously monitored due to high prices, although no investigations have been initiated in this area to date.