What is being negotiated?

Competition policy constitutes the foundation upon which a country’s market economy is established and operates. Competition protection policy occupies one of the most significant positions, as its effective implementation contributes to economic improvement, the development and growth in the number of companies, increased investment in research and development of new products, attraction of new investments, and the growth of production and exports.

By respecting competition policy, market participants are able to operate under equal market conditions, so that the only measure of their success becomes quality. As a result of healthy rivalry, i.e. effective competition, consumers benefit from a wider choice of higher-quality and more affordable products. Owing to the business environment fostered by EU competition policy, national industries become more innovative, thereby contributing to the dynamic development of the overall economy.

Sub-areas

This chapter covers the following sub-areas: antitrust (competition protection) and state aid.

Within competition protection, three segments are distinguished: concentrations (mergers), restrictive agreements (cartels), and dominant market position, i.e. its abuse.

Concentrations involve the creation of a new market participant through the merger of two or more previously independent undertakings or parts thereof (merger), or where one or more natural persons already controlling at least one undertaking, or one or more undertakings, acquire control over another undertaking or part thereof, or the establishment and joint control of a new undertaking by at least two independent undertakings, operating on a lasting basis, performing all the functions of an autonomous entity and having access to the market (joint venture). All forms of merger of two or more undertakings—whether statutory, contractual, through joint ventures, acquisition of assets or property rights, or rights arising from securities—constitute a concentration, provided that one or more undertakings acquire control over another undertaking or undertakings. Control is the decisive factor for the existence of a concentration and is determined under the conditions prescribed by law.

Restrictive agreements aim to prevent, restrict, or distort competition in the relevant market. These include written or oral agreements, arrangements, contracts, specific contractual provisions, explicit or tacit agreements, concerted practices, as well as decisions by associations of undertakings, which directly or indirectly fix purchase or selling prices or other trading conditions; limit or control production, markets, technical development, or investment; share markets or sources of supply; apply dissimilar conditions to equivalent transactions with different undertakings in the same market, thereby placing them at a competitive disadvantage; make the conclusion of agreements subject to acceptance of supplementary obligations by the other party which, by their nature or commercial purpose, are unrelated to the subject of the agreement; or impose obligations regarding resale prices or otherwise ensure the application of recommended resale prices.

The concept of a dominant market position encompasses two possible situations in which a specific undertaking may be found to hold a dominant position:

• where it has no competition in the relevant market or such competition is insignificant;

• where it holds a significantly stronger economic position compared to its competitors, taking into account market shares, economic and financial strength, access to supply and distribution markets, and legal and factual barriers to entry for other undertakings, etc.

Although the existence of a dominant position in itself does not constitute a breach of competition rules, its abuse does, and as such is prohibited by law. This prohibition is broadly defined and may encompass all forms of conduct by an undertaking previously found to hold a dominant position that meet the general conditions of a competition infringement. Abuse of a dominant market position includes directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; limiting production, markets, or technical development to the detriment of consumers; applying dissimilar conditions to equivalent transactions with other market participants, thereby placing them at a competitive disadvantage; or making the conclusion of agreements subject to acceptance of supplementary obligations unrelated, by their nature or commercial purpose, to the subject of such agreements.

State aid policy is specific and characteristic solely of the European Union as a guarantee of maintaining a level playing field in the common market of the Member States and is established by the Treaty on the Functioning of the European Union. By controlling the granting of state aid, it is ensured that national government interventions do not distort competition in the market. In this regard, state aid is defined as an advantage in any form granted on a selective basis to any undertaking or entrepreneur by national governments. Aid granted to individuals or general measures available to all are not considered state aid.

In principle, all state aid is prohibited (the so-called general prohibition clause contained in the Treaty and transposed into national legislation). However, in certain situations, interventions by national governments are necessary for the proper functioning and sustainable economy of a state. Therefore, the Treaty provides scope for objectives and purposes for which the granting of state aid may be considered compatible with the common market. Some of these objectives include research, development and innovation, environmental protection, regional development, protection of cultural heritage, services of general economic interest, etc., and in some cases—under special monitoring—aid for the rescue and restructuring of undertakings in difficulty is also permitted. State aid may take various forms, clearly visible ones such as subsidies, guarantees, and tax relief, as well as less visible forms of intervention such as debt-to-equity conversion, sale or purchase of state-owned real estate at prices below or above market value, etc.

When was the chapter opened?

The chapter was opened at the Intergovernmental Conference held on 30 June 2020 in Brussels, and temporarily closed on July 14, 2026 at the Intergovernmental Conference held in Brussels.

Opening benchmarks

Chapter 8 is one of the most demanding negotiating chapters and is always opened and closed among the last. Montenegro received five opening benchmarks for this chapter. Official confirmation that the opening benchmarks had been met was received on 4 December 2019, after which, on 6 December 2019, Montenegro submitted its Negotiating Position for the Intergovernmental Conference on the Accession of Montenegro to the EU for Chapter 8 – Competition.

Closing benchmarks

The EU Common Position for Chapter 8 – Competition defines the following four closing benchmarks:

1. Montenegro has completed legislative alignment with the EU acquis covered by the Competition chapter.

2. Montenegro has built adequate administrative and judicial capacity in the areas of antitrust rules, mergers, and state aid control.

3. Montenegro has demonstrated a satisfactory enforcement track record in the areas of antitrust rules, mergers, and state aid control, including a record of effective and efficient action by the administration and judiciary in cases of identified irregularities, inter alia through the imposition of deterrent sanctions.

4. In the following cases, the Agency for the Protection of Competition, as the national competent authority for state aid, has assessed the existence and compatibility of state aid with the provisions of the Stabilisation and Association Agreement (SAA) on state aid and has ordered its recovery where such aid was found incompatible:
   – in the case of “Montenegro Airlines”, assessing whether the state aid granted since 2012 was compatible with the SAA provisions on state aid, including the provisions of the Law on Investment in the Consolidation and Development of “Montenegro Airlines” adopted by the Parliament of Montenegro in December 2019;
   – determining whether Uniprom’s KAP received unlawful aid;
   – with regard to the Bar–Boljare motorway, determining whether unlawful aid was involved in financing its construction and operation.

What are the activities in the upcoming period?

The main activities in the forthcoming period will focus on improving results in competition policy and state aid control, with particular emphasis on sanctioning policy and specific state aid cases. One of the key prerequisites for progress in this chapter is strengthening the capacity for enforcement of legislation in this area.

Institutions/organisations participating in the negotiating group

The negotiator for this chapter is from the Ministry of Economy, while the head of the Working Group is from the Agency for the Protection of Competition. A representative of the Office for European Integration serves as the contact person for this chapter.

Institutions/organisations participating in the Working Group include: the Ministry of Economy; the Ministry of Science; the Ministry of Culture; the Ministry of Transport and Maritime Affairs; the Ministry of Agriculture and Rural Development; the Administrative Court of Montenegro; the Commercial Court of Montenegro; the Higher Misdemeanour Court of Montenegro; the Agency for the Protection of Competition; the Investment and Development Fund of Montenegro; the Chamber of Economy of Montenegro; the Employers’ Union of Montenegro; the Mediterranean University; the University of Montenegro; the NGO European Movement in Montenegro; and the Trade Union of Banks of Montenegro.

What are the benefits of this chapter for Montenegro?

This chapter brings multiple benefits, both to citizens and to Montenegro as a state. First and foremost, the proper implementation of the policies under this chapter creates conditions for increasing the competitiveness of the economy and developing an open market. Alignment of competition protection regulations with the practice of European courts and the European Commission ensures legal certainty for all market participants and security for long-term business planning in Montenegro. It enables the inflow of new investments, as investors know that their capital is protected from prohibited influence by dominant market players, business cartels, or unlawful mergers. The implementation of these policies creates a higher-quality market with a broad range of goods and services, improved quality and lower prices compared to the current situation, while the inflow of new investments should contribute to balanced national development, a reduction in unemployment, and an improved standard of living for all citizens.