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20 December 2019

Competition authority imposes landmark fine under leniency programme

The Commission for the Protection of Competition has published its first leniency decision in a cartel case, following a report by one of the cartel participants.

Konica Minolta distributors and dealers had engaged in collusive tendering in procurement procedures for acquiring office equipment and providing office machine repair and maintenance services in Serbia.

This is a landmark decision because the commission imposed a record cartel fine of €500,000 (7.55%, 6.18% and 3.21% of the annual turnovers of the undertakings concerned, respectively). Such uncharacteristically high fines are in line with the commission's previous practice of imposing severe penalties on bid-rigging cartel participants.

A leniency programme had been introduced in 2009 but had yielded no results. This recent decision is therefore a watershed moment in the programme's development and signals an improvement in the commission's anti-cartel enforcement record.

The commission granted the cartel participant full immunity from the fine because it had self-reported and handed over evidence before the commission knew about the competition law infringement. The leniency applicant's information was sufficient to initiate proceedings and conduct dawn raids, which involved making forensic images of computer hard drives and collecting other evidence of collusion in the tender preparation process.

The leniency decision is also important because the commission held that the practice of penalising bid-rigging cartels should be applied not only to public procurement procedures subject to the Public Procurement Act (ie, launched by public bodies or companies), but also to those launched by market participants not subject to the act (eg, private companies).

This article first appeared on International Law Office.

authors: Zoran Šoljaga and Srdjana Petronijević