Montenegro: Novelties in the field of Competition Law in Montenegro

Competition

Uroš Popović

Publisher: Bojović & Partners

The end of 2014 saw significant activities in the field of competition law in Montenegro. Namely, on 4 December 2014, the Government of Montenegro has enacted two relevant decrees in this field – the Decree on Block Exemption of Agreements in Road and Railroad Traffic and Traffic in Inland Waters and Consortium Agreements in Maritime Shipping Lanes Traffic, and the Decree on Block Exemption of Technology Transfer Agreements. Both decrees prescribe requirements, procedure and criteria for block exemption, tailored in line with specific nature and importance of the respective types of agreements. 

The first Decree applies to all agreements, decisions and concerted practices concluded in relation to road and railroad traffic and traffic in inland waters, which, as their object or effect, have the fixing of price and determination of transport conditions by which the transport service offer is being limited or determined, sharing the transportation market, the application of technical improvements or technical cooperation, i.e. joint financing or procurement of transportation equipment or services when such activities are directly related to provision of transportation services and are necessary for joint provision of service by the group of business entities engaged in the activity of road and railroad transportation or transportation in inland waters. It also applies to all acts and actions of the dominant market participant which, as their object or effect, have the fixing of price and determination of transportation conditions in relation to transactions and business operations of other market participants. The Decree specifically regulates the requirements for block exemption of consortium agreements on international line transportation with the departure or receiving port in the territory of Montenegro or in the territory of the European Union. 

The second Decree prescribes the requirements which, besides the requirements set out in Article 9 of the Competition Law, need to be fulfilled in order to apply the block exemption rule to technology transfer agreements, precisely, to all contractual provisions on transfer of technology in relation to the purchase of products by the licensee or which are related to licencing or assignment of other intellectual property rights or know-how in favour of the licensee, to the extent in which those contractual provisions are related to the manufacturing or sale of the contractual product, and which may potentially prevent, restrict or distort competition. The block exemption rule from this Decree will apply to a particular case if the following market share requirement is fulfilled:

- if the contractual parties are competitors in the relevant market – their joint market share must not exceed 20% in the relevant market, 

- if the contractual parties are not competitors in the relevant market – the market share of each contractual party must not exceed 30% in the relevant market in which the party performs its business. 

Although the enactment of these decrees represents a step forward in the competition legislation of Montenegro, tying the moment of commencement of their application with the moment of entry of Montenegro into European Union greatly, if not completely, diminishes their significance in the short and likely medium term.