International Information Centre for Balkan Studies

EWB: Experts warn Telekom-Telenor deal could threaten market competition

February 22, 2021

The European Western Balkans (EWB) portal on Monday quoted Serbian experts who warned that the Telekom-Telenor agreement could turn into a monopoly and become a threat to market competition.

It recalled that documents showing that the state-owned Telekom Serbia intends to merge with the private Telenor mobile services provider to reduce the market share of Serbian Broadband (SBB) which distributes N1 and Nova S, two of the few remaining non-regime affiliated TV channels. The agreement between Telekom and Telenor does not only call into question free competition between market participants, but also freedom of expression, which is an obstacle on the European path that was noted in the reports of the European Commission and other international bodies, it said.

EWB quoted Strasbourg University professor Uros Cemalovic, an expert on European Union law, who said that there are three ways to jeopardize free market competition: restrictive agreements, abuse of dominant position and concentration of market players. “Not all restrictive agreements are necessarily illegal,” he said and added that under Serbian law “restrictive agreements can be exempted if they contribute to the improvement of production and trade, i.e. encourage technical or economic progress, and provide consumers with a fair share of benefits”. Cemalovic added that the decision is up to the Competition Protection Commission which means the market players who make a restrictive deal can ask the commission for exemption. Cemalovic said that the decisions taken by the Commission will face public scrutiny and will certainly be reviewed by the European Commission.

A press release on the Commission portal on January 27, 2021 said that Telekom and Telenor asked for an individual exemption.

Dusan Protic, Program Manager for Internal Market and Competitiveness at the Center for European Policies, agrees with Cemalovic but says that the problem with the Telenor-Telekom deal is that its goal is to squeeze out or even eliminate the competition. “What the Commission does in the Telenor-Telecom case will be a very important institutional stress test, which will answer show whether it has achieved the necessary capacity and independence that meets the reputation and needs of our market, and especially its position and competencies under the law”, Protic said.

Former Serbian National Bank (NBS) Governor and university economics professor Dejan Soskic warned that it seems that Serbia is joining the group of countries that are weakening their state institutions over time and that it is really further away from European standards. “I would like to be wrong, but I do not think that the Commission will do its job independently and professionally”, he said. Soskic also warned that the authorities are sending a bad message to investors by siding with Telekom. “A country that has very low investments in relation to GDP, such as Serbia, and which wants to attract foreign investments for the economic development of the country, should certainly not allow such actions,” said Soskic.

Source:  https://rs.n1info.com/english/ewb-experts-warn-telekom-telenor-deal-could-threaten-market-competition/

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