EPS Distribucija handed a EUR 2.6 million fine

Serbian Competition Commission fines the Electricity Distribution Company

The Serbian Competition Commission found that the company EPS Distribucija, the only operator of the electricity distribution network in Serbia, abused its dominant position in the market of electricity distribution in Serbia. The abuse consists of applying dissimilar conditions to equivalent transactions with trading parties, whereby some of those trading parties have been placed at a competitive disadvantage in comparison to their competitors. The abuse was the result of, amongst other things, a non-transparent business policy of EPS Distribucija.

In particular, the Commission found that, in granting access to its distribution network, EPS Distribucija gave more advantageous conditions to its affiliate, EPS Snabdevanje, when compared to other commercial electricity suppliers. Both EPS Distribucija and EPS Snabdevanje are wholly-owned subsidiaries of the vertically integrated public company Elektroprivreda Srbije, the state-owned electric utility power company.

Based on the Commission’s findings, the abusive practices of EPS Distribucija resulted in an increase of the cost of electricity for the end consumers. In addition to several behavioural measures aimed at ceasing the abusive practices, EPS Distribucija now faces EUR 2.6 million fine, which is 0.6% of its total annual turnover realised in 2015. While the company has the right to appeal to the Administrative Court, the claim does not suspend the payment of the fine unless granted by the Administrative Court on the basis of a reasoned request.

As a reminder, holding a dominant position is not in itself anti-competitive under Serbian Competition Law, but if the company exploits this position to limit or eliminate competition, it may amount to an abuse and a breach of the Competition Law.