This July, the President of the Serbian Competition Commission (the "Commission"), Mr. Miloje Obradović, hinted in an interview that the Commission was ready to commence unannounced market investigations (dawn raids) of companies suspected of infringing competition law. The President stated that the Commission did not intend to focus on small companies, but rather, on leading market players.
Last week, the Commission made a public statement, revealing the undertaking of the first dawn raids in relation to an alleged cartel agreement. Unannounced inspections were carried out at the premises of distributers of electronic cigarettes and e-liquids at several locations in the city of Belgrade.
Proceedings were initiated based on the suspicion that the companies involved concluded agreements on establishing minimum prices in the retail trade. The Commission refrained from providing any additional information so as not to jeopardize the ongoing proceedings.
The Law on Protection of Competition empowered the Commission to execute dawn raids a few years ago. They are performed by taking on-the-spot control over business premises, documents and objects, without any advance notification. Telephones and computers may be seized by the Commission and examined for evidence of wrongdoing using sophisticated forensic analysis tools. Incriminating correspondence or other evidence located through dawn raids has often resulted in the imposition of serious fines for competition infringements.
Even though dawn raids represent a key mechanism in uncovering cartel agreements and other forms of competition infringement, the Commission has not relied on them to date, mainly due to capacity constraints. However, the Commission recently acquired new software for forensic analysis and data processing, with the assistance of funds from the European Commission and the IPA. Additionally, Commission employees have undergone the required training, so that dawn raids can now be executed more effectively. Companies would do well to brush up on compliance and internal procedures, preparing both management and employees for the possibility of sudden antitrust inspections.
The Commission appears to be following the lead of the Croatian Competition Agency which, since 2014, has increasingly relied on dawn raids. In Croatia, proceedings based on dawn raids are still in early stages, so it remains to be seen how the courts will review the undertaken actions, the admissibility of evidence and the authority exercised by the competition agency. However, regional enforcement trends clearly demonstrate improved capacity of regulators and greater reliance on dawn raids as an effective tool in the fight against competition infringements.