Montenegro’s government has moved forward with a comprehensive package of amendments to the Law on Protection of Competition that, if adopted, would materially change how market dominance, cartel behaviour, and merger control are enforced in the country. The proposed reform represents a decisive departure from a system that has long been criticised for weak deterrence and procedural fragmentation, replacing it with a framework that concentrates sanctioning power within the competition authority and sharply raises financial exposure for non-compliant companies.
At the centre of the reform is the transfer of sanctioning authority to the Agency for Protection of Competition. Under the existing legal regime, the agency is responsible for investigating breaches of competition rules and establishing whether an infringement has occurred, but it does not have the power to impose penalties directly. Instead, cases are forwarded to misdemeanor courts, which then determine fines through a separate procedure. In practice, this two-track system has resulted in lengthy delays, inconsistent outcomes, and penalties that many market participants view as insufficient to deter serious anticompetitive conduct.
The proposed amendments eliminate this structural bottleneck by granting the agency direct administrative fining powers. For companies found to have engaged in prohibited agreements, cartel arrangements, or abuse of a dominant market position, the authority would be able to impose fines of up to 10 % of total annual turnover, calculated on the basis of the company’s consolidated revenues. This ceiling aligns Montenegro’s sanctioning framework with that of the European Union, where turnover-based fines are the standard enforcement tool in competition cases.
Importantly, the draft law does not merely raise the maximum penalty; it also introduces a more flexible sanctioning scale. While earlier versions of the law prescribed a minimum fine threshold, the proposed amendments remove this constraint, allowing the authority to impose penalties below 1 % of turnover in cases where the infringement is assessed as less severe or where mitigating circumstances are present. This design reflects a clear intention to move toward proportional, case-specific enforcement rather than a rigid, formula-driven approach.
From an investor and corporate-governance perspective, this shift materially increases regulatory risk exposure in Montenegro. A fine linked directly to revenue rather than to fixed statutory amounts introduces a level of financial uncertainty that has not previously existed in the local market. For larger groups operating in sectors such as energy, telecommunications, retail, construction, and transport, a sanction at the upper end of the proposed range could translate into multi-million-euro liabilities, with direct implications for cash flow, dividend policies, and financing covenants.
The reform package also modernises the treatment of restrictive agreements. The current system requires companies to apply for individual exemptions if they believe that a restrictive agreement meets statutory conditions for permissibility. The proposed amendments abolish this administrative pre-clearance mechanism and replace it with a self-assessment model. Under the new approach, companies would be expected to evaluate the legality of their own agreements ex ante and to be prepared to justify that assessment if challenged by the authority. This mirrors the post-2004 EU competition model and shifts compliance responsibility squarely onto market participants.
In parallel, the draft law revises merger-control procedures. One of the most significant changes is the removal of the strict fifteen-day deadline for notifying concentrations following the conclusion of a transaction. Instead, parties would be required to notify concentrations “without delay” once notification thresholds are met. While this wording provides greater procedural flexibility, it also places a premium on internal compliance systems, as delays or misjudgements in notification timing could themselves become a source of regulatory exposure.
A further pillar of the reform is the introduction of a dedicated legal framework for private damages arising from competition infringements. The proposed so-called Damage Law establishes the right of individuals and companies to claim full compensation for harm suffered as a result of anticompetitive conduct, including lost profits and interest. Crucially, a final infringement decision by the competition authority or the administrative court would be binding on civil courts in subsequent damages actions. This significantly lowers the evidentiary burden for claimants and opens the door to follow-on litigation once an infringement has been established.
For Montenegro’s business environment, this combination of stronger public enforcement and facilitated private claims represents a qualitative change. Until now, competition law has been perceived largely as a formal compliance obligation with limited practical consequences. The proposed amendments transform it into a materially enforceable regime with both administrative and civil-law repercussions. Companies active in concentrated markets, or those with structurally strong positions, will need to reassess pricing strategies, exclusivity arrangements, and cooperation agreements in light of the expanded enforcement toolkit.
The government has framed the reform as part of a broader alignment with EU acquis obligations in the field of competition policy. From a macro-economic standpoint, stronger competition enforcement is intended to support market entry, reduce distortions, and improve consumer welfare. From a capital-markets perspective, however, the changes also introduce a new layer of regulatory discipline that investors will factor into risk assessments, particularly in sectors characterised by high market concentration or legacy dominant players.
Business associations have raised concerns during consultations about potential legal uncertainty and compliance costs, especially for smaller companies that may lack in-house legal capacity. These concerns are not without merit. A self-assessment regime combined with high turnover-based fines requires a level of legal sophistication that is unevenly distributed across the Montenegrin corporate landscape. At the same time, proponents of the reform argue that predictability will ultimately improve as administrative practice and case law develop under the new system.
If adopted by parliament in its current form, the amendments would constitute the most far-reaching overhaul of Montenegro’s competition framework in more than a decade. They would reposition the Agency for Protection of Competition as a central market regulator with real sanctioning power, align domestic rules more closely with EU standards, and materially alter the risk calculus for companies operating in the Montenegrin market. The transition period following adoption is likely to be closely watched by both domestic businesses and foreign investors, as early enforcement actions will set the tone for how assertively the new powers are used in practice.
