Serbian merger control rules are laid down in the Law on the Protection of Competition (Official Gazette of RS, No 51/2009 and 95/2013) (the “Competition Act”), applicable as of 1 November 2009.

In addition to the Competition Act, merger control is governed by several bylaws and implementing regulations, of which the most relevant are:

• the Decree on the Content and the Manner of Submission of Merger Notifications (Uredba o sadržini i načinu podnošenja prijave koncentracije) (Official Gazette of RS, No 5/2016), which regulates the required content and form of merger notifications;
• the Decree on the Criteria for Defining Relevant Markets (Uredba o kriterijumima za određivanje relevantnog tržišta) (Official Gazette of RS, No 89/2009);
• the Decree on the Criteria for Determining the Amount Payable on the Basis of Measures for the Protection of Competition and Procedural Penalties, the Manner and Deadlines for their Payment and the Conditions for Determining these Measures (Uredba o kriterijumima za određivanje visine iznosa koji se plaća na osnovu mere zaštite konkurencije i procesnog penala, načinu i rokovima plaćanja i uslovima za određivanje tih mera) (Official Gazette of RS, No 50/2010) (the “Decree on Fines”);
• the Guidelines on the Application of the Ordinance on Fines (of 19 May 2011) (Smernice za primenu Uredbe o kriterijumima za određivanje visine iznosa koji se plaća na osnovu mere zaštite konkurencije i procesnog penala, načinu i rokovima plaćanja i uslovima za određivanje tih mera), which supplement the Decree on Fines; and
• the Guidelines on the Content and Manner for Submission of the Request for Protection of Data Protection of the Commission for the Protection of Competition of 7 April 2023 (Uputstvo o sadržini i načinu podnošenja zahteva za određivanje mere zaštite podataka).

A foreign investment regime comparable to European regimes prescribed by the EU FDI Screening Regulation does not exist in Serbia. However, certain transactions in the defence sector are to be notified for foreign investment screening and approval.

The Competition Act applies to concentrations regardless of sectors they relate to. Nonetheless, in certain sectors, sector-specific legislation is applicable in addition to the Competition Act, as follows.

• For banks, insurance companies and voluntary pension funds – Acquisition (direct or indirect) of a qualified shareholding requires the previous approval of the National Bank of Serbia.
• For open and alternative investment funds – Acquisition (direct or indirect) of a qualified shareholding requires the prior approval of the Securities Exchange Commission.
• Media – Any change in the ownership structure of a participant in the media market that is subject to regulatory permit is also subject to the prior approval of the Regulatory Body for Electronic Media.
• Telecommunications – Acquisition (direct or indirect) of qualified shareholdings is to be notified to the Regulatory Agency for Electronic Communications and Postal Services.

The authority responsible for the enforcement of the Competition Act is the Serbian Commission for Protection of Competition (Komisija za zaštitu konkurencije) (the “Serbian NCA”).

Notification to the Serbian NCA is compulsory if the transaction meets the turnover thresholds (as outlined in 2.5 Jurisdictional Thresholds).

Theoretically, notification is possible on a voluntary basis if the transaction does not meet the above thresholds but includes parties whose combined market share on the Serbian market is at least 40%, or where, due to some other reasons, it cannot be concluded with certainty that such transaction will not significantly impede competition. Nevertheless, it is understood that there has been no such case before the Serbian NCA.

A failure to notify the Serbian NCA of a notifiable transaction and/or its implementation without obtaining a previous clearance decision is subject to a fine of up to 10% of the total annual turnover generated in Serbia in the preceding year.

There has been a significant increase in the opening of ex officio investigation proceedings for breaches of the Competition Act. In that context, since 2017, the Serbian NCA has initiated ten investigations relating to concentrations implemented without prior notification and consequently without a previous clearance decision (a so-called gun-jumping violation).

Four concentrations were later cleared by the Serbian NCA. However, within the same decision, the said authority imposed a monetary fine against the acquirer. These decisions have been made public. As to the other four investigations, in one it was determined that the relevant jurisdictional thresholds were not fulfilled, while the five remaining investigations are still ongoing. In most of these cases, both parties to the concentration generated a turnover on the Serbian market, so the transaction theoretically could affect competition in Serbia. In two cases, an investigation proceeding was initiated against an acquirer that is a foreign company.

Pursuant to the Competition Act, the following types of transactions are to be considered as concentrations:

• mergers and other statutory changes leading to consolidation of undertakings;
• acquisitions by one (sole control) or more (joint control) undertakings of direct or indirect control over another undertaking or undertakings, or parts of undertakings that can be considered to constitute an individual business unit; and
• establishments of joint ventures or acquisitions of joint control over existing undertakings, performing on a long-term basis all functions of an autonomous undertaking.

Based on the practice of the Serbian NCA, acquisition of control over the assets shall be considered as a concentration only if such assets constitute a business with a market presence to which a turnover can be attributed.

The Competition Act does not cover internal restructurings or reorganisations, provided they do not result in a change of control.

Transactions not involving the transfer of shares or assets (eg, shareholders’ agreements, changes to articles of association) may be notifiable if they involve a change of control.

The Competition Act specifies that there is no obligation to file a merger notification in the following situations:

• where banks, other financial undertakings or insurance companies whose normal activities include transactions and dealing in securities are temporarily in possession of interests in an undertaking acquired with the intention to resell, provided that they do not exercise ownership rights for the purpose of determining the competitive conduct of that undertaking and that the disposal takes place within one year of the date of acquisition;
• where control is acquired by a bankruptcy administrator;
• where an investment fund or investment fund holding company acquires an undertaking, provided that the voting rights held by such company are only exercised to retain the full value of the acquired undertaking and not to determine its competitive conduct; or
• the creation of a joint venture that has as its aim the co-ordination between two or more undertakings which retain their independence, whereby each joint venture will be assessed in accordance with the rules on restrictive agreements.

Pursuant to the Competition Act, an undertaking is deemed to have control over another undertaking if it has the potential to exercise decisive influence on the latter’s activities. Such influence can be based on:

• a controlling shareholding;
• ownership or ownership rights over the assets (or parts of the assets) of an undertaking;
• rights deriving from contracts or securities;
• receivables or guarantees over receivables; and
• business practice determined by the controlling undertaking.

In addition, the said Act recognises two categories of control: sole and joint.

Acquisition of a minority shareholding is caught by merger control only when it grants de facto or de jure (sole or joint) control of the acquiring undertakings over the target. As per the existing practice of the Serbian NCA, effective control over the company includes:

• potential to decide the most important/strategic business decisions independently;
• potential to dispose independently of major value assets; and/or
• holding of veto rights not limited exclusively to the protection of its investors’ interests.

According to the Competition Act, a merger notification must be filed to the Serbian NCA if the following thresholds are met:

• the combined aggregate annual worldwide turnover of all parties to the concentration exceeds EUR100 million, and (ii) at least one of the parties to the concentration generated a turnover in excess of EUR10 million on the Serbian market; or
• the combined aggregate annual turnover of at least two parties to the concentration on the Serbian market exceeds EUR20 million, and (ii) each of at least two of the parties to the concentration generated a turnover in excess of EUR1 million on the Serbian market.

The Competition Act provides a special rule where the control over a Serbian joint stock company is acquired through a public bid, in which case, regardless of whether the above thresholds have been fulfilled, the concentration must be notified.

Furthermore, based on said Act, the Serbian NCA may open an ex officio investigation proceeding even when the above-mentioned thresholds were not met if the following two conditions are fulfilled: (i) a market share of the parties to the concentration in Serbia is at least 40% or there is a reasonable indication that the concentration is to be prohibited; and (ii) the transaction has already been implemented. However, it is yet to be seen how this rule will be applied by the Serbian NCA.

Special jurisdictional thresholds applicable to particular sectors have not been prescribed; however, the applicability of the sector-specific regulation (as noted in 1.2 Legislation Relating to Particular Sectors) requires previous approval of a competent regulator, irrespective of whether the above jurisdictional thresholds for the merger filing have been met.

Turnovers are calculated by taking into account all revenues derived from the sale of products or provision of services in the year preceding the year in which the concentration is notified. The Competition Act provides special rules for the calculation of the turnover applicable to banks, credit institutions and financial entities as well as insurance companies.

Amounts expressed in euros are calculated in RSD at the middle exchange rate of the National Bank of Serbia on the day of calculation of the annual turnover.

The turnover that is considered for the purpose of calculating the thresholds differs according to the type of transaction, as follows.

• In the acquisition of sole control, for the acquiring party, turnover assumes the group consolidated turnover and, for the seller, the turnover of the target. The value of exports must be deducted for the calculation of local (domestic) turnover.
• In a merger, turnover assumes the group consolidated turnover of all merging undertakings.
• In the acquisition of joint control over a joint venture, turnover assumes the group consolidated turnover of all parent companies and, in the case of a pre-existing activity, the turnover of the joint venture itself.

The calculation of turnover is based on the verified accounts for the financial year preceding the concentration. Changes in the business during the reference period shall not be taken into the account.

Foreign-to-foreign transactions that meet the above thresholds are subject to the Serbian merger control regime. Moreover, the “domestic effects doctrine”, according to which there is no notification requirement in case of lack of local effects of a transaction, has not been recognised by the Serbian NCA. Finally, there is not an exemption for transactions with no overlap of the activities, although there is a short form notification available.

In practice, the vast majority of the concentrations notified and approved by the Serbian NCA related to foreign-to-foreign transactions, where the target was not present at all on the Serbian market, ie, did not generate any turnover.

In Serbia there is no market share jurisdictional threshold.

As explained in 2.3 Types of Transactions, joint ventures are subject to merger control. Regarding the calculation of jurisdictional thresholds in joint ventures, please see 2.5 Jurisdictional Thresholds.

The statute of limitations on the authorities’ ability to investigate is five years from the implementation of the transaction.

A transaction cannot be implemented before it has been approved by the Serbian NCA.

The only exception is where control over a Serbian joint stock company is acquired through a public bid, provided that the transaction is immediately notified, and that the acquirer does not exercise the voting rights attached to the shares in question or only does so based on an exemption granted by the subject authority.

As described in 2.2 Failure to Notify, parties that implement a concentration before obtaining a clearance decision issued by the Serbian NCA may be subject to a fine. Since 2017, there has been a tendency for the said authority to investigate such transactions and impose fines.

As explained in 2.12 Requirement for Clearance Before Implementation, a takeover bid may be implemented before a clearance decision is issued by the Serbian NCA, provided that the concentration is immediately notified, and that the acquirer does not exercise the voting rights attached to the securities in question or only does so based on an exemption granted by the authority. In other cases, it is not possible to seek a waiver or derogation from the suspensive effect.

There is no carve-out provision in Serbia. Apart from the exceptions detailed in 2.14 Exemptions to Suspensive Effect, the Competition Act does not provide any specific circumstance allowing closing of the transaction before its clearance by the Serbian NCA.

A concentration must be notified within 15 days following any of the following acts, whichever occurs first:

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

On 11 November 2009, the Serbian NCA issued an opinion explaining that a bidder might opt to file a merger notification within 15 days following either the publication of the public bid or the closing of the bid.

The parties may notify a transaction if they demonstrate their serious intent to enter into an agreement (eg, by signing a letter of intent, announcing their intent to make a takeover offer, or any other similar act demonstrating serious intent).

In its Notice on notifications filed based on serious intent, published on 5 July 2016, the Serbian NCA explained that the document evidencing serious intent must explicitly show such intent of all parties to engage in the transaction and must be signed by all of them. If such document deviates in key facts on which the Serbian NCA based its clearance decision from the final and binding transactional document, the parties will bear all the risks connected with implementing such a transaction contrary to said decision.

The filing fee for clearance decisions issued in a summary (Phase I) proceeding is 0.03% of the combined annual turnover of the undertakings concerned – capped at EUR25,000. For clearance decisions in an investigation (Phase II) proceeding, the fee is 0.07% of the combined annual turnover of the undertakings concerned – capped at EUR50,000.

The said fees are to be paid within three days following the submission of the notification, failing which, the notification will be deemed withdrawn.

Under the Competition Act, if an undertaking acquires control over the whole or part of one or more other undertakings, the undertaking acquiring the control must file the merger notification.

In the case of joint ventures, a notification is to be submitted by the joint venture partners.

In line with relevant bylaws, there are two types of notification: the short and the long form, both available on the website of the Serbian NCA.

A concentration eligible for a short form notification should meet one of the following conditions.

• Where two or more undertakings merge, or one or more undertakings acquire sole or joint control over another undertaking or a part thereof, provided that no party to the concentration is active in the same relevant product and geographic markets, or in the same relevant product market as any other party to the concentration upstream or downstream.
• Where two or more undertakings merge, or one or more undertakings acquire sole or joint control over another undertaking or a part thereof, provided that the following conditions are met:
1. the aggregate market share of all parties in a horizontal merger is lower than 20%; and
2. the individual or aggregate market share of all parties in a vertical merger is lower than 30%.
• Where the notifying party acquires sole control over an undertaking over which it already has joint control.
• Where the aggregate market share of all the horizontally related parties in the concentration is lower than 40% and the change (delta) in the HHI resulting from the concentration is less than 150.

If none of the above specified criteria are met, the concentration must be notified in the regular (long form) notification. The Serbian NCA can also request that a long-form filing be submitted in cases where the facts of the case indicate that a concentration does meet the criteria for it to be approved.

The merger notification must be submitted in the Serbian language, and it must be undersigned by the legal representatives of the notifying parties. All appendices can be submitted as copies, while documents in a foreign language must be submitted along with their translation into Serbian by a sworn court interpreter. The Serbian NCA may request any other information it considers relevant for the assessment of the intended concentration, and, if it is not provided, the notification might be dismissed.

If the notification is deemed incomplete, the case handler at the Serbian NCA shall request the notifying parties to provide additional information, within a fixed timeline. Should the parties fail to provide the additional information, the notification will be dismissed.

Pursuant to the Competition Act, parties that do not comply with a request to provide all required documentation and/or data, or provide false or incorrect data, face procedural fines in the range of EUR500–5,000 per day of delay, capped at 10% of the total annual turnover achieved by the violating undertaking(s). In several merger control cases, the Serbian NCA has imposed such procedural fines.

For possible penalties and consequences of supplying inaccurate or misleading information to the Serbian NCA, please see 3.6 Penalties/Consequences of Incomplete Notification.

Under the Competition Act, the Serbian NCA is obliged to decide within one month from the receipt of a complete notification whether to clear the transaction in a summary (Phase I) proceeding or to open, ex officio, an investigation (Phase II) proceeding.

The “clock will start ticking” only once the notifying party has submitted all documents which the Serbian NCA requires for assessment of the concentration, but there is no formal deadline for the review of completeness of the notification.

If the authority does not decide within one month from the receipt of a complete merger notification (to clear the concentration in a summary (Phase I) proceeding or open an investigation (Phase II) proceeding), the concentration is deemed cleared (so-called tacit approval).

However, should the Serbian NCA decide to open investigation (Phase II) proceedings, it must decide ultimately whether to (unconditionally or conditionally) clear or prohibit the transaction within four months from the date of its opening, otherwise the concentration is deemed cleared.

The vast majority of transactions cleared by the Serbian NCA were decided within the summary (Phase I) proceeding. In practice, in such cases, if the parties prepared the notification well, a clearance decision was issued within 25 days from the date of filing.

Phase II includes a deeper investigation by the authority, including detailed market surveys. Sometimes it includes an economic analysis and eventually the negotiation on remedies, so often it lasts for a longer period beyond the above-mentioned four-month deadline.

Pre-notification discussions with the Serbian NCA are not regulated and, in practice, they are rare.

The Serbian NCA enjoys significant information-gathering powers and may request information from the parties to the concentration and from third parties (customers, suppliers and competitors) as well as from state officials and agencies (ministries, tax authorities, statistical office, Serbian Chamber of Commerce, etc).

Requests for information (RFIs) during the merger review process are relatively frequent and can be burdensome for the parties to the concentration. If the Serbian NCA sends an RFI to the parties, the period from the date of delivery of such request to the date of response is not included in the statutory time limits for issuing a decision.

There are two types of notification to be used: the short and the long form, depending on actual transaction.

For more information on the criteria for the applicability of a short form notification and on summary (Phase I) proceedings, please see 3.5 Information Included in a Filing and 3.8 Review Process.

The Serbian NCA uses a test of significant impediment to effective competition. Consequently, a concentration will be considered incompatible with the Serbian market where it would significantly impede effective competition in the market, in particular because of the creation or strengthening of a dominant position.

When determining which markets may be affected by the transaction, the Serbian NCA considers the market definition proposed by notifying parties, but also it investigates alternative market definitions, relying on its own practice as well as the European Commission’s decisional practice. In cases where the market definition is rather complex, the Serbian NCA may query competitors and customers in order to obtain their opinions.

The focus of the Serbian NCA is on the markets where both parties to the concentration perform economic activity (horizontal overlaps); however, vertically connected markets are also assessed. The concept of a de minimis level is not applicable.

The decisional practice of the Serbian NCA, including on market definition, follows its own case law and, quite often, the European Commission’s decisional practice.

As explained at 4.1 Substantive Test, the test against which a concentration will be assessed by the Serbian NCA is whether it would cause a “significant restriction, distortion or prevention of competition, particularly as a result of the creating or strengthening of a dominant position”.

It includes a review of the horizontal, vertical and/or conglomerate aspects of the proposed concentration. Pursuant to the Competition Act, the said authority shall base its appraisal on considering:

• structure of the relevant market;
• existing and potential competitors;
• market position of the parties to the concentration and their economic and financial power;
• freedom of choice when choosing suppliers and consumers;
• legal and other market entry barriers;
• the level of competitiveness of the parties to the concentration;
• trends of supply and demand of relevant goods and/or services;
• trends of technical and economic development; and
• consumers’ interests.

The Serbian NCA has a legal basis to take into account economic efficiencies when assessing concentrations; however, this ground is rarely referred to.

When assessing a transaction, the Serbian NCA should not take into account non-competition issues.

Rules separate from merger control in case of foreign direct investments do not exist, and filings for foreign direct investments are not required.

Full-function joint ventures are analysed by means of the same substantive test as other concentrations.

The Serbian NCA can prohibit a concentration, provided that the latter leads to a significant restriction, distortion or prevention of competition on the Serbian market, in particular if it would create or strengthen a dominant position. The said authority issues a prohibition decision in written form, in which it must provide detailed explanations for its conclusions.

In addition, if a concentration has been implemented in violation of the Competition Act or in breach of a prohibition decision, the authority may require the undertakings concerned to dissolve the concentration, so as to restore the situation in the market prevailing before its implementation.

A notifying party may negotiate remedies if the Serbian NCA concludes that the proposed transaction will significantly restrict, distort or prevent competition. In such case, the authority shall issue a statement of objections to the notifying party to notify the facts and evidence on which it intends to base its decision, and shall ask the notifying party to provide its comments. In its reply, the notifying party may also suggest obligations and conditions which it is willing to undertake with the aim of removing the anti-competitive concerns identified. If said authority concludes that such remedies are sufficient, it will clear the transaction.

Remedies may be of a structural or behavioural nature. The decisional practice of the Serbian NCA shows that behavioural remedies are used more often.

There is no legal standard that remedies must meet to be deemed acceptable. However, as per the practice of the Serbian NCA so far, such remedies must be proportionate and directly related to the competition concerns at hand.

Even though the Competition Act suggests that the remedies can be offered only when the Serbian NCA issues a statement of objections to the notifying parties, in practice remedies could be offered from the beginning of the merger control process, even before initiation of an investigation (Phase II) proceeding.

The Serbian NCA cannot propose or impose, by its decision, remedies not being proposed by the notifying party.

The conditions and timings for all types of remedies are individual and vary case by case.

Parties to the concentration may complete a transaction only when the Serbian NCA has made the remedies binding in its clearance decision.

If the remedies are implemented after a deadline set by the clearance decision, the Serbian NCA may impose a fine of up to 10% of the undertaking’s turnover acquired on the Serbian market and also may order the undertaking to dissolve the concentration, so as to restore the situation in the market prevailing before its implementation.

A formal decision permitting or prohibiting a transaction is issued to the notifying parties. The Serbian NCA publishes a non-confidential version of its clearance decision on its website.

Furthermore, the said authority publishes on its website a decision to open an investigation (Phase II) proceeding immediately after its adoption, and invites all undertakings that might have information and documents relevant for the assessment of the subject concentration to submit them to the Serbian NCA as soon as possible. The said decision of the Serbian NCA contains a summary of the notification, with a description of the key elements of the concentration.

To date, the Serbian NCA has prohibited implementation of transactions only twice. Both decisions were issued ten years ago.

Decisions ordering remedies do occur, but not regularly. There is no difference between the remedies required in local as opposed to foreign-to-foreign transactions.

Neither the Competition Act nor any bylaws regulate ancillary restraints. In practice, the Serbian NCA uses the European Commission’s Ancillary Restraints Notice as a framework for its own appraisal of concentration, so ancillary restraints are to be covered by a clearance decision.

Third parties, including competitors, may be involved through their answers to the Serbian NCA’s RFIs or market surveys. In case of an investigation (Phase II) proceedings, third parties may voluntarily provide the authority with relevant information and documents, as the decision on opening the said proceeding is to be published on the website of the Serbian NCA.

However, third parties that submit information and documentation and provide comments stating their concerns regarding the transaction cannot intervene in the review process.

In complex merger control proceedings, the Serbian NCA typically contacts third parties, mostly in the form of an RFI. Market testing of the offered remedies is not standard.

When it renders a final decision concerning the concentration, the Serbian NCA will generally issue a statement in this respect on its official website and will also publish the said decision, redacted of all confidential information of the parties to the concentration.

Notifying parties are requested to identify, in separate requests, both in the notification and in responses to additional RFIs, all information that they consider should be kept confidential and submit a non-confidential version of these documents.

The Serbian NCA co-operates on general policy matters with a few organisations and authorities in other jurisdictions such as the European Commission, the United Nations Conference on Trade and Development (UNCTAD) and the International Competition Network (ICN). It also participates in the Organisation for Economic Co-operation and Development’s Regional Competition Centre, the Sofia Competition Forum. Furthermore, the Serbian NCA co-operates with several national competition authorities, including most of the competition authorities from the region.

However, the said authority is not entitled to share any information on specific transactions with other jurisdictions.

Decisions of the Serbian NCA are final and may be challenged via submission of an administrative claim for judicial review before the Administrative Court (Upravni sud). Such filing does not postpone enforcement of the decision.

Claims against rulings of the Administrative Court are lodged with the Supreme Court of Cassation (Vrhovni kasacioni sud) and are limited to points of law.

The deadline for bringing a claim to the Administrative Court is 30 days from the date of receipt of a decision of the Serbian NCA.

The Competition Act stipulates fixed deadlines for the review process before the Administrative Court and the Supreme Court of Cassation.

In practice, success in claims based on decisions on merger control is quite rare.

The Competition Act does not regulate who is entitled to bring a claim before the Administrative Court.

Based on the practice of the Administrative Court so far (confirmed in a few cases by the higher court instance), third parties, such as direct competitors or consumers, do not have standing to bring a claim or to appear before the Administrative Court in this kind of dispute.

In transactions involving direct investment or foreign subsidies, there is no legislation that requires any type of separate filing, other than under the merger control rules.