Dominance Abuse Investigation Against the Klett Group

21.10.2021.

On 21 October 2021, the Serbian Competition Commission (the “Commission”) initiated ex-officio proceeding against publishing companies Klett, Freska and Logos (Klett group) in order to establish the existence of an act of abuse of a dominant position, in the sense of Article 16 of the Law on Protection of Competition.

Namely, the Commission conducted an analysis of the textbook market for primary education in Serbia during 2018-2020 (so-called sector analyses). During the sector analysis, the Commission received the Initiative of another publishing company Epoha d.o.o. from Požega indicating the eventual abuse of the dominant position of the company Klett group because the mentioned group refused to continue cooperation.

Based on the conducted analysis of data on revenues from the sale of textbooks and on other data, the Commission concluded that the relevant market is highly concentrated and assumed that the Klett group has a significant market share of textbook sales (over 50%), whereby the first next competitor has a negligible market share relative to the Klett group.

In its decision published on http://www.kzk.gov.rs/kzk/wp-content/uploads/2021/10/Zaklju%C4%8Dak-o-pokretanju-postupka-Klett-grupa.pdf, the Commission stated a number of examples of the potential abuse of a dominant position of Klett group. In that sense, it is stated that other publishers could not access the mentioned market due to a number of barriers, such as “aggressive” promotion of textbooks by Klett group, their corrupt activities, the rebate amount policy for distributors of Klett group textbooks, reducing the number of Klett group distributors, etc.

Based on the statements of market participants obtained during the implementation of the sector analysis, the Commission assumed that Klett group took actions that, viewed individually and/or all together, could be contrary to the provisions of Article 16 of the Law on Protection of Competition and could be seen as an abuse of a dominant position.

It remains to be seen how the procedure for examining a breach of competition in a particular case will end, whether the market participants would change their behavior on the market and whether this could influence the penetration of other publishers in the school curriculum.