Montenegrin “Luka Kotor” Port Fined For The Abuse Of Dominance

Montenegrin “Luka Kotor” Port Fined For The Abuse Of Dominance

Bisera Andrijasevic of BDK Advokati discusses a recent fine of Montenegrin “Luka Kotor” port for the abuse of dominance.

The Montenegrin antitrust authority, the Agency for Protection of Competition of Montenegro (“Agency“), announced that the Higher Misdemeanour Court of Montenegro imposed on 10 July 2018 a fine in the amount of EUR 27.249,54 on the Montenegrin port operator “Luka Kotor” A.D. (“Luka Kotor“) for abuse of dominant position that had been established by the Agency in 2016. The fine represents 1% of the infringer’s relevant turnover. The court also fined Luka Kotor’s director with EUR 1.000,00.

Background

The case before the Agency was a slam dunk. In addition to the port services performed on an exclusive basis in the maritime domain in Kotor, Luka Kotor also provides the services of marine pilotage on a non-exclusive basis within the territory of the entire Boka Bay, including in the port of Kotor. Two other companies are also authorised to provide marine pilotage service within the same territory. Having analysed the market for pilotage services, the Agency established that Luka Kotor provided pilotage service in addition to its main port service in the Kotor aquatorium in over 98% of the cases. The same clients, however, engaged Luka Kotor for pilotage services much less frequently outside the Kotor aquatorium.

After an investigation, the Agency established that Luka Kotor, as a concessionaire in the port of Kotor aquatorium, had abused its dominant position on the relevant market for provision of port services (anchoring, berthing, and related services), by requiring agents and ship operators to engage Luka Kotor also for pilotage services whenever Kotor was the arrival and departure port of a vessel. Specifically, in July 2015 Luka Kotor refused to accept into the port a motor yacht operated by the maritime agency “BWA” d.o.o because the agency had chosen another provider of pilotage service. The Agency concluded that such behaviour of Luka Kotor prevents and restricts competition on the market for pilotage services within port of Kotor aquatorium.

The Agency ordered Luka Kotor to restrain from such abusive behaviour and establish non‑discriminatory commercial conditions for its pilotage service, in a clear and transparent manner, by way of:

  • informing the maritime agencies/ship operators of their right to independently and freely choose the providers of pilotage services in the port of Kotor;
  • informing the maritime agencies/ship-operators that Luka Kotor does not have an exclusive right to provide pilotage service, and that other services provided by Luka Kotor are not directly related to the pilotage service; and
  • informing the Agency at least twice a year in the period of two years from the Agency’s decision on the maritime agents’ requests for of the pilotage service in the port of Kotor, Luka Kotor’s responses to such requests, and the commercial conditions for the provided pilotage service.

Having established the infringement, the Agency, not having itself the authority to fine the infringers, motioned for the initiation of misdemeanour proceedings against Luka Kotor and its director.

In its annual work report for 2016, the Agency reported that Luka Kotor was fully compliant with the imposed behavioural measures, and also that the competent Misdemeanour Court had dismissed the Agency’s motion for misdemeanour proceedings. The Agency appealed to the Higher Misdemeanour Court which granted the appeal and referred the case back to the first-instance misdemeanour court for new proceedings. The decision of the first-instance misdemeanour court is not publicly available. However, it follows from the Agency’s press release of 30 July 2018 that the first-instance court again dismissed the Agency and that the Higher Misdemeanour Court ultimately issued the fine upon the renewed appeal of the Agency.

Bisera Andrijasevic of BDK Advokati discusses a recent fine of Montenegrin “Luka Kotor” port for the abuse of dominance.

The Montenegrin antitrust authority, the Agency for Protection of Competition of Montenegro (“Agency“), announced that the Higher Misdemeanour Court of Montenegro imposed on 10 July 2018 a fine in the amount of EUR 27.249,54 on the Montenegrin port operator “Luka Kotor” A.D. (“Luka Kotor“) for abuse of dominant position that had been established by the Agency in 2016. The fine represents 1% of the infringer’s relevant turnover. The court also fined Luka Kotor’s director with EUR 1.000,00.

Background

The case before the Agency was a slam dunk. In addition to the port services performed on an exclusive basis in the maritime domain in Kotor, Luka Kotor also provides the services of marine pilotage on a non-exclusive basis within the territory of the entire Boka Bay, including in the port of Kotor. Two other companies are also authorised to provide marine pilotage service within the same territory. Having analysed the market for pilotage services, the Agency established that Luka Kotor provided pilotage service in addition to its main port service in the Kotor aquatorium in over 98% of the cases. The same clients, however, engaged Luka Kotor for pilotage services much less frequently outside the Kotor aquatorium.

After an investigation, the Agency established that Luka Kotor, as a concessionaire in the port of Kotor aquatorium, had abused its dominant position on the relevant market for provision of port services (anchoring, berthing, and related services), by requiring agents and ship operators to engage Luka Kotor also for pilotage services whenever Kotor was the arrival and departure port of a vessel. Specifically, in July 2015 Luka Kotor refused to accept into the port a motor yacht operated by the maritime agency “BWA” d.o.o because the agency had chosen another provider of pilotage service. The Agency concluded that such behaviour of Luka Kotor prevents and restricts competition on the market for pilotage services within port of Kotor aquatorium.

The Agency ordered Luka Kotor to restrain from such abusive behaviour and establish non‑discriminatory commercial conditions for its pilotage service, in a clear and transparent manner, by way of:

  • informing the maritime agencies/ship operators of their right to independently and freely choose the providers of pilotage services in the port of Kotor;
  • informing the maritime agencies/ship-operators that Luka Kotor does not have an exclusive right to provide pilotage service, and that other services provided by Luka Kotor are not directly related to the pilotage service; and
  • informing the Agency at least twice a year in the period of two years from the Agency’s decision on the maritime agents’ requests for of the pilotage service in the port of Kotor, Luka Kotor’s responses to such requests, and the commercial conditions for the provided pilotage service.

Having established the infringement, the Agency, not having itself the authority to fine the infringers, motioned for the initiation of misdemeanour proceedings against Luka Kotor and its director.

In its annual work report for 2016, the Agency reported that Luka Kotor was fully compliant with the imposed behavioural measures, and also that the competent Misdemeanour Court had dismissed the Agency’s motion for misdemeanour proceedings. The Agency appealed to the Higher Misdemeanour Court which granted the appeal and referred the case back to the first-instance misdemeanour court for new proceedings. The decision of the first-instance misdemeanour court is not publicly available. However, it follows from the Agency’s press release of 30 July 2018 that the first-instance court again dismissed the Agency and that the Higher Misdemeanour Court ultimately issued the fine upon the renewed appeal of the Agency.