CONSORTIA BIDDING IN THE SEE REGION : WHEN DOES COOPERATION BECOME COLLUSION?

Abstract

Over the past two decades, the Southeast European (SEE) region has faced persistent challenges in closing the economic development gap with more advanced parts of Europe. To achieve progress in this regard, this region must foster greater cooperation among market participants and promote the execution of large-scale projects while simultaneously ensuring the preservation of competitive market conditions. Since many large-scale projects are executed through public procurements, the legal frameworks and regulatory practices governing consortia bidding may play a pivotal role in shaping the competitive landscape. In this broader context, this paper analyses the competition law enforcement in the SEE region, identifying notable disparities and highlighting variations in national practices and regulatory capacities. Based on the legal and economic analysis, the paper emphasizes the necessity for national competition authorities across the SEE region to adopt the rule of reason approach (i.e., consider the efficiency argument) when assessing consortia bidding. That is crucial since it appears nearly impossible to distinguish pro-competitive cooperation from anti-competitive collusion without conducting an in-depth economic analysis of the effects that a given consortium bidding may have on competition.

Full text

EU AND COMPARATIVE LAW ISSUES AND CHALLENGES SERIES ECLIC 8 – SPECIAL ISSUE
70
UDK 346.546.5:658.7]:339.137(4-12)
Preliminary communication
CONSORTIA BIDDING IN THE SEE REGION:
WHEN DOES COOPERATION BECOME
COLLUSION?
Nikola Ilić, Ph.D., Assistant professor
University of Belgrade Faculty of Law
Bulevar Kralja Aleksandra 67, Belgrade, Serbia
nikola.ilic@ius.bg.ac.rs
Abstract
Over the past two decades, the Southeast European (SEE) region has faced persistent challenges
in closing the economic development gap with more advanced parts of Europe. To achieve prog-
ress in this regard, this region must foster greater cooperation among market participants and
promote the execution of large-scale projects while simultaneously ensuring the preservation
of competitive market conditions. Since many large-scale projects are executed through public
procurements, the legal frameworks and regulatory practices governing consortia bidding may
play a pivotal role in shaping the competitive landscape. In this broader context, this paper
analyses the competition law enforcement in the SEE region, identifying notable disparities
and highlighting variations in national practices and regulatory capacities. Based on the legal
and economic analysis, the paper emphasizes the necessity for national competition authorities
across the SEE region to adopt the rule of reason approach (i.e., consider the eciency argu-
ment) when assessing consortia bidding. at is crucial since it appears nearly impossible to
distinguish pro-competitive cooperation from anti-competitive collusion without conducting
an in-depth economic analysis of the eects that a given consortium bidding may have on
competition.
Key words: consortia bidding, joint bidding, public procurements, bid rigging, collusion.
“What we see depends mainly on what we look for.”
John Lubbock (1834–1913)
1. INTRODUCTION
Consortia (or consortium) bidding is a situation where multiple economic enti-
ties, often from different sectors or industries, cooperate to submit a single joint
bid within a private or public procurement procedure.1 is form of cooperation
1 In U.S. antitrust literature, consortia bidding is commonly referred to as joint bidding; Hoffman, E.;
Marsden, J. R.; Saidi, R., Are Joint Bidding and Competitive Common Value Auction Markets Compat-

Nikola Ilić: CONSORTIA BIDDING IN THE SEE REGION: WHEN DOES COOPERATION... 71
typically occurs through a consortium, where the bidding entities (or consortium
partners) jointly participate in the procurement.2 Alternatively, it may also appear
in the form of subcontracting, where one bidding entity agrees, prior to the bid,
to delegate one or more tasks to another party if the contract is awarded.3
Regardless of its form, consortia bidding commonly occurs in large-scale public
procurements that require diverse expertise and considerable financial resources.
Moreover, many consortia biddings include consortia members from different re-
gions or countries. Due to these and other specificities of consortia biddings, it
could be extremely challenging to assess their impact on competition. On one side
of the spectrum, by pooling their resources, consortia members may become sig-
nificantly more competitive and thus meet the set requirements more efficiently.
On the other side of the spectrum, collusion between consortia members may
harm competition and lead to considerable economic inefficiencies. us, it is es-
sential for each legal system to identify the various categories of consortia bidding
and to establish effective mechanisms for distinguishing among them.
is distinction is increasingly significant in the South and East European (SEE)
region.4 Namely, the SEE region has been recording a rise in large-scale infrastruc-
tural projects and other public and joint venture investments, requiring the co-
operation of numerous legal entities from different countries for successful imple-
mentation. In this context, depending on a particular legal regulation, consortia
bidding may significantly strengthen competition and contribute to the further
economic development of the region, or it could distort competition and prevent
many significant projects from being executed. Having that in mind, the primary
ible? – Some Evidence from Oshore Oil Auctions, Journal of Environmental Economics and Manage-
ment, Vol. 20, Issue 2, 1991, pp. 99–112.
2 Additionally, a distinction can be made between temporary and structural consortia. Temporary con-
sortia refer to ad hoc cooperation agreements that dissolve if another firm submits the lowest bid. In
contrast, structural consortia involve longer-term agreements or joint ventures, often covering multiple
tenders and reflecting a more enduring collaborative arrangement between the participating entities;
Bouckaert, J.; Geert, M., Joint bidding and horizontal subcontracting, International Journal of Industrial
Organization, Vol. 76, Article 102727, 2021, pp. 2–3.
3 In general, subcontracting can be arranged either before the submission of a joint bid or after the con-
tract has been awarded. Typically, only in the former case subcontracting may be qualified as consortia
bidding, and under certain conditions, it may raise concerns regarding bid rigging; See: Marion, J.,
Sourcing from the enemy: Horizontal subcontracting in highway procurement, Journal of Industrial Eco-
nomics, Vol. 63, Issue 1, 2015, pp. 100–128.
4 In this paper, the SEE region is defined as a group of countries that includes the former Yugoslav states
(Bosnia and Herzegovina, Croatia, Serbia, Slovenia, Montenegro, and North Macedonia), Albania,
Bulgaria, and Romania, due to their geographical, historical, and political interconnectedness.

EU AND COMPARATIVE LAW ISSUES AND CHALLENGES SERIES ECLIC 8 – SPECIAL ISSUE
72
goal of this paper is to analyze and clarify the existing legal and regulatory frame-
work governing consortia bidding in the SEE region.5
To achieve that objective, the paper first analyses the economics of consortia bid-
ding, focusing on social costs and benefits associated with the cooperation be-
tween legal entities when submitting a joint bid (Part 2). It then explores the legal
definitions of consortia bidding across various European competition law systems,
primarily focusing on the European Commission’s approach to this issue (Part 3).
Subsequently, the paper identifies and addresses key competition law concerns
associated with consortia bidding in the SEE region (Part 4) and concludes with
final remarks (Part 5).
2. CONSORTIA BIDDING ECONOMICS IN A NUTSHELL
In economics, the auction theory explains in detail how individuals or entities
behave when bidding in auctions,6 and joint bidding is a specific aspect of it, as
the practice when two or more bidders cooperate to place a single bid. In general,
findings within this theory emphasize the main potential benefits and potential
costs of joint bidding, while every single case has to be analyzed separately.
On the one hand, the primary benefits of joint bidding include risk sharing, re-
source pooling, and the reduction of barriers to entry, all of which may enhance
the competitiveness of market participants and foster market competition. On
the other hand, joint bidding generates substantial coordination costs, exacerbates
information asymmetry, and heightens regulatory and legal expenses due to the
risk of collusion among market participants and potential harm to competition.
In the first place, joint bidding enables market participants to share the financial,
operational, and technical risk associated with project implementation,7 thereby
reducing the burden on any single market participant, which is particularly im-
portant for large-scale and complex projects. Namely, the substantial risk inherent
in such large projects often renders them infeasible for a single market participant
5 e central focus of this paper is on competition law and policy. However, one should also recognise
the broader impact the rule of law and anticorruption policies may have on consortia bidding and
competition; See: Estache, A.; Iimi, A., Joint Bidding, Governance and Public Procurement Costs: A Case
of Road Projects, Annals of Public and Cooperative Economics, Vol. 80, Issue 3, 2009, pp. 424–425.
6 Milgrom., P., Putting Auction eory to Work, Cambridge University Press, Cambridge, 2004, pp.
2–26; Menezes, M.F.; Monteiro, K.P., An Introduction to Auction eory, Oxford University Press, New
York, 2007, pp.71–115.
7 Albano, G. L.; Spagnolo, G.; Zanza, M., Regulating Joint Bidding in Public Procurement, Journal of
Competition Law & Economics, Vol. 5, Issue 2, 2009, pp. 348–350,

Nikola Ilić: CONSORTIA BIDDING IN THE SEE REGION: WHEN DOES COOPERATION... 73
to undertake independently.8 us, joint bidding may be essential for executing
many high-stakes projects. Secondly, joint bidding allows market participants to
consolidate their material, financial, and human resources to submit a bid and
execute the project, which would be less effective or infeasible if pursued inde-
pendently. Finally, as a result of these and other advantages, joint bidding lowers
barriers to entry, enabling relatively smaller market participants to participate in
large-scale projects and contribute to their successful execution.9 In other words,
all these benefits of joint (or consortia) bidding may substantially enhance market
participants’ competitiveness and strengthen market competition.
However, at the same time, cooperation between market participants when sub-
mitting a bid and executing the project may lead to numerous adverse economic
consequences. e most significant ones are increased costs associated with the
participants’ coordination and inefficiencies arising from issues of information
asymmetry, such as principal-agent problems, moral hazards, adverse selections,
and others.10 In addition, this coordination among numerous market participants
may increase dispute settlement costs and regulatory expenses. On top of that,
even when undertakings can bid independently, they are strongly incentivised to
opt for cooperative behaviours such as colluding on bid prices, terms, or strategies,
resulting in undermined competition and heightened profits for the colluding
parties.11 is is the primary reason why legislators and regulators must allocate
substantial human and material resources to investigate and prosecute such prac-
tices. Simply put, any cooperation among market participants incurs operational
costs, and certain types of cooperation, i.e., collaboration, can further inflict con-
8 is risk includes, but is not limited to the risk of failure; See: Watson, J., Modelling the Relationship
between Networking and Firm Performance, Journal of Business Venturing, Vol. 22 No. 6, 2007, p. 854;
Shen, J.; Pretorius, F.; Li, X., Does Joint Bidding Reduce Competition? Evidence from Hong Kong Land
Auctions, e Journal of Real Estate Finance and Economics. Vol. 58, 2019, p. 113.
9 Albano, G. L., et al., op. cit., pp. 354–356; Woldesenbet, K.; Worthington, I., Public Procurement and
Small Businesses: Estranged or Engaged? Journal of Small Business Management, Vol. 57 No. 4, 2019,
pp. 1665–1666.
10 Lewis, G.; Bajari, P., Moral hazard, incentive contracts, and risk: evidence from procurement, Review
of Economic Studies, Vol. 81, Issue 3, 2014, pp. 1201–1228; Chernomaz, K., On the Eects of Joint
Bidding in Independent Private Value Auctions: An Experimental Study, Games and Economic Behavior,
Vol. 76, Issue 2, 2012, pp. 705–706; Iimi, A. (Anti-)Competitive eect of joint bidding: evidence from
ODA procurement auctions, Journal of the Japanese and International Economies, Vol. 18, Issue 3,
2004, pp. 417–419.
11 Christopher, T., Two Bids or not to Bid? An Exploration of the Legality of Joint Bidding and Subcontracting
Under EU Competition Law, Journal of European Competition Law & Practice, Vol. 6, Issue 9, 2015,
630–631; Estache, A.; Iimi, A., Joint Bidding, Governance and Public Procurement Costs: A Case of Road
Projects, Annals of Public and Cooperative Economics, Vol. 80, Issue 3, 2009, pp. 396–397.

EU AND COMPARATIVE LAW ISSUES AND CHALLENGES SERIES ECLIC 8 – SPECIAL ISSUE
74
siderable harm to competition.12 us, the potential costs of joint bidding are
highly case-specific.13
Table 1: Potential Benefits and Costs of Consortia Bidding
Consortia Bidding
(joint bidding)
Potential benets (PB) Potential costs (PC)
Risk sharing Coordination costs
Resource pooling Information asymmetry costs
Eliminating barriers to entry Dispute settlement and regulatory costs
Strengthening competition Harming competition
Source: e author
Table 1 summarises the potential costs and benefits of joint or consortia bidding
and the resulting consequences. Moreover, each benefit and cost could be further
analysed and subcategorised for a more detailed examination. However, even this
general preview is sufficient to distinguish two different groups of market partici-
pants’ behaviours when submitting a joint bid. e first group consists of market
participants who could submit a bid independently (on a stand-alone basis), and
the second group consists of those who could not. Within the first group, there
is a high probability that potential costs will outweigh potential benefits since
market participants are efficient enough to compete and bid independently. Only
exceptionally, cooperation between independent market participants could gener-
ate more significant potential benefits compared to the costs.
In contrast, participants within the second group are incapable of solo bidding,
which increases the likelihood that their cooperation will result in higher poten-
tial benefits than the costs. Only in exceptional cases, participants in this group
may engage in collusion, resulting in higher costs than benefits. Finally, those
two groups may partially overlap, i.e., in some specific cases, market participants
who can bid independently may establish cooperation with those who cannot. In
that case, there is also a higher probability that the benefits of cooperation will
12 According to some estimates, collusion between auction participants, on average, increases prices and
causes damages to up to 23% of the total volume of commerce; Froeb, L.M.; Shor, M., Auction, Evi-
dence and Antitrust, in: Harkrider, J. (ed.), e Use of Econometrics in Antitrust, Chicago, 2002, pp.
233–234.
13 Similarly, the net-effect of joint bidding on conservation auctions’ cost efficiency is ambiguous and it
depends on specific circumstances of the case: See: Calel, R., Improving Cost-Eciency of Conservation
Auctions with Joint Bidding, Journal of Environmental Economics and Policy, Vol.1, Issue 2, 2012,
pp.128–129.

Nikola Ilić: CONSORTIA BIDDING IN THE SEE REGION: WHEN DOES COOPERATION... 75
outweigh the costs, primarily due to the reduction of barriers to entry, except in
the case of collusion. Figure 1 presents these two groups of market participants
(potential bidders) and the possible outcomes of their behaviour.
Figure 1: Two Groups of Consortia Members, Potential Benefits (PB), and Poten-
tial Costs (PC) of Consortia Bidding
Source: e author
Although it is not possible to determine the exact potential costs and benefits for
these two groups due to the varying types of cooperation and participants, i.e.
highly case-specific costs and benefits, Figure 1 provides a general illustration of
these types and their possible outcomes.
Based on this general observation, one may conclude that the likelihood of co-
operation yielding benefits that outweigh the costs is highest when market par-
ticipants are unable to bid individually (on a stand-alone basis). On the contrary,
when they can submit individual bids, there is a higher probability that the costs
of joint bidding will outweigh the benefits. However, one should be aware of
the exceptions to those rules, particularly in the case of cooperation between two
different types of market participants, i.e. when those who can bid individually
cooperate with those who cannot.
In general, this delineation between the rules and exceptions may be equalised
with the distinction between cooperation and collusion. In economic terms, a
joint bid can be classified as cooperation when the benefits exceed the costs and
strengthen market competition; conversely, when the costs outweigh the benefits
and undermine competition, the joint bid may be qualified as collusion. In this
context, the analysis of the different types of market participants and their behav-
iours could provide a solid foundation for evaluating and potentially reformulat-
ing legal rules that differentiate between desirable cooperation and undesirable
collusion associated with joint bidding. However, in the first place, it is essential

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76
to briefly explain and clarify the conventional legal approaches to joint (consortia)
bidding and the relevant legal definitions.
3. LEGAL DEFINITION AND EUROPEAN COMMISSION’S
APPROACH TO CONSORTIA BIDDING
Traditionally, competition authorities in the United States and Europe did not
define the meaning of joint or consortia bidding, and they have primarily relied
on two main criteria when evaluating those biddings.14 e first criterion referred
to the “no-solo-bidding test”, or the ability of market participants to bid indepen-
dently. Namely, when failing this test, market participants lowered the number
of competitors by submitting a joint bid and thus reduced competition in the
market, which has been argued by the United States Congress when prohibiting
consortia bidding arrangements between oil companies for offshore oil leases.15
Similarly, European competition authorities have been using the ability to bid
independently as the main criterion to assess joint bidding, including the recent
decision of the competition authority in Norway, upheld by the Supreme Court in
2017.16 In addition, as the second and subsidiary criterion, national competition
authorities have been using offsetting efficiencies.17 Even if market participants fail
the non-solo bidding test, competition authorities may approve the joint bidding
if it establishes that joint bidding generates sufficient offsetting efficiencies or ben-
efits that can outweigh potential anti-competitive effects, such as cost savings, im-
proved quality and innovation, etc. For instance, the Italian competition authority
has recently approved the joint bidding by the two competing pharmaceutical
companies that could have submitted bids independently due to sufficient off-
setting efficiencies.18 Similarly, the Danish competition authority initially found
that a consortium agreement and the established cooperation between the two
road marking companies infringed Article 101 TFEU and the equivalent Danish
competition law provision since the companies could have bid independently.
However, in the second instance, the Danish High Court emphasised that an as-
sessment of consortia bidding under competition law has to be based on a realistic
14 Bouckaert, J.; Geert, M., op. cit., pp. 1–2.
15 Hendricks K., Porter, H., Joint bidding in federal OCS auctions, American Economic Review, Vol. 82,
No.2, 1992, pp. 506–5011.
16 Judgment of the Court of 22 December 2016 in case E-3/16, Ski Taxi SA, Follo Taxi SA and Ski Follo
Taxidrift AS v. e Norwegian Government, represented by the Competition Authority, OJ C 133/5,
27.4.2017; Sanchez Graells, A., Ski Taxi: Joint Bidding in Procurement as Price-Fixing?, Journal of Eu-
ropean Competition Law and Practice, Vol. 9, Issue 3, 2018, pp. 161–163.
17 Bouckaert, J.; Geert, M., op. cit., p. 2.
18 Richards, M., Italy Drops Pharma Bidding Probe, Global Competition Review, 2019, https://bit.
ly/2FfXToU, last access 02.10.2024.

Nikola Ilić: CONSORTIA BIDDING IN THE SEE REGION: WHEN DOES COOPERATION... 77
assessment of market conditions (considering the offsetting efficiencies) and ruled
on the legality of the consortium bidding.19
In addition to the established case law, the European Commission (EC), for the
first time, provided a formal definition of consortia bidding in the 2023 Guide-
lines on the applicability of Article 101 TFEU.20 Namely, the Guidelines broadly
define consortium bidding as “a situation where two or more parties cooperate to
submit a joint bid in a public or private procurement competition”.21 In addition
to this definition, the Guidelines clarify that consortia bidding is not illegal per se,
i.e., it does not automatically infringe Article 101 TFEU.22 To establish whether
joint bidding infringes Article 101 TFEU, the Guidelines suggest a rule of reason
approach where anti-competitive risks should be weighed against potential ef-
ficiency gains.23 In this context, the Guidelines emphasise several relevant criteria,
including the necessity, consortia members’ market power, and the scope of the
cooperation agreement.24 In accordance with these criteria, a consortium should
be necessary to achieve efficiencies, and a joint bid may be seen as anti-competitive
if each consortium member could have submitted a bid individually. In addition,
the impact of joint bidding on competition may depend on the market power of
the consortium members, i.e., if the members are significant players in the market,
their cooperation may considerably reduce competition by lowering the number
of independent bids. Moreover, the scope of cooperation and the exchange of
information between parties should be limited to what is necessary for achieving
the project objectives, i.e. extending the cooperation to encompass activities such
as price-fixing or market-sharing beyond unavoidable level would most probably
constitute an infringement of Article 101 TFEU.25
19 e Danish Maritime and Commercial High Court judgement in the LKF/Eurostar case, dated August
27, 2018, was appealed by the Danish Competition Authority to the Supreme Court. In 2019, the
Supreme Court ruled that the consortium’s cooperation violated the Competition Act. However, this
ruling did not challenge the lower court’s adoption of the rule of reason approach; See: Kjær-Hansen,
E.; Alsing, J., Danish Court: Consortium Agreement and Joint Bidding Permissible under Competition
Law, Journal of European Competition Law & Practice, Vol. 10, Issue 4, 2019, pp. 241–245.
20 EC Guidelines on the applicability of Article 101 of the TFEU to horizontal co-operation agreements
[2023] OJ C 259; ese Guidelines have replaced the previous EC Guidelines on the applicability of
Article 101 of the TFEU to horizontal co-operation agreements [2011], which addressed the issue of
consortia bidding only in para. 237, specifying undisputed situation, i.e. that consortia members who
are not competitors and cannot bid individually would not restrict competition within the meaning of
Article 101(1) TFEU.
21 Ibid., para. 347.
22 Ibid., para. 352, 356, and 358.
23 Ibid., para. 356.
24 Ibid., para. 356.
25 Ibid., para. 357 (d); Even in the case of a consortium agreement concluded between competitors that
falls under Article 101 TFEU, the Guidelines explicitly indicate that such agreement may fulfil the

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In defining consortia bidding, the Guidelines also provide a formal definition of
bid rigging and make an effort to clearly distinguish between the two concepts. For
this purpose, bid rigging is defined as “[…] one of the most serious restrictions of
competition, constituting a restriction by object, and may take various forms, such
as agreeing the content of each party’s tenders […] to influence the outcome of the
award procedure […].”26 Moreover, under the Guideline’s provisions, bid rigging
is “[…] a form of cartel that consists in the manipulation of a tender procedure
for the award of a contract”.27 However, despite these definitions, the Guidelines
acknowledge that “[…] in some cases, the distinction between bid rigging and
legitimate forms of joint bidding is not straightforward […]”.28 is is especially
relevant in (cross-)subcontracting, where the distinction between anti-competitive
behaviour and legitimate cooperation can be nuanced.29 is complexity particu-
larly underscores the need for a thorough analysis on a case-by-case basis, i.e., the
rule of reason approach to ensure that the joint activity’s purpose, necessity, and
potential efficiency gains are carefully considered. erefore, although the Guide-
lines define both consortia bidding and bid rigging, the boundary between legiti-
mate collaboration and illegal collusion remains exceptionally thin. is ambigu-
ity necessitates careful scrutiny, as even minor differences in intent or execution
can transform lawful joint bidding into anti-competitive collusion.
is approach aligns with the underlying economics of consortia bidding. As previ-
ously explained, consortia bidding can involve diverse types of market participants
and behaviours, each presenting unique costs and benefits. For participants capa-
ble of submitting independent bids, the probability that anti-competitive risks or
inefficiencies will outweigh the potential benefits is higher due to the diminished
necessity for cooperation. In such cases, the likelihood of collusion becomes more
significant, as the joint bidding may serve primarily to reduce competition rather
than to achieve efficiencies. Conversely, for participants who lack the resources or
capacity to bid independently, the probability that pro-competitive benefits, such
as pooled resources or expertise, will outweigh potential inefficiencies is greater.
In these cases, consortium bidding may enable participation that would otherwise
be unfeasible, fostering competition rather than stifling it. In any event, both of
these scenarios are susceptible to exceptions, confirming that the rule of reason
conditions set out in Article 101(3), thereby qualifying for exemption from the prohibition; See: Petr,
M., Joint Tendering in the European Economic Area, International and Comparative Law Review, Vol.
20, No. 1, 2020, p. 218; Puksas, A.; Moisejevas, R.; Petkuvienė, R., Competition Law Implications for
Joint Bidding During Public Procurement, Studia Iuridica Lublinensia, Vol. 33, Issue 2, 2024, p. 323.
26 Ibid., para. 349.
27 Ibid. para. 348.
28 Ibid., para. 349.
29 Ibid.

Nikola Ilić: CONSORTIA BIDDING IN THE SEE REGION: WHEN DOES COOPERATION... 79
approach remains essential for distinguishing between cooperation and collusion
on a case-by-case basis.
4. CONSORTIA BIDDING PUZZLE IN THE SEE REGION
e issue of consortia bidding is particularly pertinent in the SEE region.30 Over
the past decades, this region has faced persistent challenges in closing the eco-
nomic development gap with more advanced parts of Europe. To achieve progress
in this regard, the SEE region must foster greater cooperation among market par-
ticipants and promote the execution of large-scale projects while simultaneously
ensuring the preservation of competitive market conditions. Since many of these
large-scale projects must be executed through public or private procurement pro-
cedures, the legal and regulatory framework governing consortia bidding becomes
particularly significant. Namely, the manner in which consortia bidding is defined
and regulated plays a crucial role in determining the success of such projects,
influencing both their execution and the preservation of competitive market dy-
namics in the region.
In general, the SEE countries, including the EU member states like Bulgaria, Cro-
atia, Romania, and Slovenia, as well as candidates or aspiring members like Serbia
and North Macedonia, have aligned their national competition laws with EU
competition rules under Articles 101 (1) and 101 (3) of TFEU.31 us, consortia
bidding can fall under these provisions if they restrict competition by object or
effect. In addition, if a consortium generates efficiencies and consumer benefits or
meets other specific criteria, it may qualify for exemptions under certain condi-
tions. However, variations in enforcing competition law across the SEE region
are noticeable, reflecting differing national practices and administrative capacities.
30 As already noted, the SEE region is defined as a group of countries that includes the former Yugoslav
states (Bosnia and Herzegovina, Croatia, Serbia, Slovenia, Montenegro, and North Macedonia), Alba-
nia, Bulgaria, and Romania, due to their geographical, historical, and political interconnectedness.
31 See: for Albania: Law No. 9121 on the Protection of Competition (Ligji nr. 9121 për Mbrojtjen e
Konkurencës), Off. Gazette No. 6 of 2003, amended by Law No. 27/2016, art. 4 and 7; for Bosnia
and Herzegovina: Competition Act (Zakon o konkurenciji), Off. Gazette of BH No. 48/05, art. 4 and
5; for Bulgaria: Law on the Protection of Competition (Закон за защита на конкуренцията), State
Gazette No. 102 of 1998, art. 15 and 21; for Croatia: Competition Act (Zakon o zaštiti tržišnog nat-
jecanja), Off. Gazette No. 148/2005, 76/2007, 79/2009, 80/2013, 30/2014, 117/2018, art. 8 and 9;
for Montenegro: Law on Protection of Competition (Zakon o zaštiti konkurencije), Off. Gazette No.
36/2012, art. 8 and 9; for North Macedonia: Law on Protection of Competition (Закон за заштита
на конкуренцијата), Off. Gazette No. 145/2010, art. 11 and 12; for Romania: Law No. 21/1996 on
Competition (Legea concurenței nr. 21/1996), Off. Gazette No. 15/1996, art. 5 and 6; Serbia: Law on
Protection of Competition (Закон о заштити конкуренције), Off. Gazette No. 51/2009, 95/2013,
art. 10 and 11; and for Slovenia: Prevention of Restriction of Competition Act (Zakon o preprečevanju
omejevanja konkurence, ZPOmK-1), Off. Gazette No. 36/2008, art. 6 and 9.

EU AND COMPARATIVE LAW ISSUES AND CHALLENGES SERIES ECLIC 8 – SPECIAL ISSUE
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In this regard, although Bulgaria, Croatia, Romania, and Slovenia are all EU mem-
ber states, their approaches to consortia bidding exhibit slight variations. Namely,
only the Romanian competition authority has issued a specific Guide referring to
joint bidding and competition law enforcement.32 is Guide, in subsection 3.2.,
explicitly states that competitors who could have submitted bids independently
can submit a joint bid since that may enable them to combine different compara-
tive advantages and bid more efficiently. However, in such cases, the Guide places
the burden of proof on the consortia members, requiring them to demonstrate
that the pro-competitive efficiencies resulting from consortia bidding outweigh
any potential restrictions on competition.33 In contrast, other EU member states
within the SEE region apply provisions on restrictive agreements without the is-
suance of specific guidelines. While certain states, such as Croatia, have developed
guidance on public procurements,34 these documents do not explicitly address
the issue of joint or consortia bidding. In any event, with the issuance of the EC
Guidelines on the applicability of Article 101 TFEU, it is anticipated that all EU
member states within the SEE region will adopt a rule of reason approach, assess-
ing consortia bidding on a case-by-case basis to distinguish between legitimate
cooperation and collusion. In this context, EU competition case law will remain
highly pertinent in evaluating the pro-competitive benefits of joint bidding as well
as any potential inefficiencies.
Similarly, the majority of non-EU member states within the SEE region lack
specific guidelines on consortia bidding and primarily rely on general provisions
regulating restrictive agreements. A notable exception in this regard is the Serbian
competition authority, which has issued the Opinion on the applicability of com-
petition law in the context of joint bidding.35 According to this opinion, “[…]
consortia agreements in public procurement procedures shall not be considered
restrictive […] where such agreements are concluded between undertakings: 1.
that are not competitors […], [or] 2. that are considered affiliated undertakings
32 Romania Consiliul Concurenței, Guide on compliance with competition rules in the case of participa-
tion in the form of association in a public procurement procedure (Ro: Ghid privind respectarea reg-
ulilor de concurență în situația participării sub formă de asociere la o procedură de achiziție publică),
31.01.2017.
33 Ibid., pp. 13–14.
34 e Croatian Competition Agency Rulebook on Implementing the Simplified Public Procurement
Procedure (Cro. Pravilnik o provođenju postupka jednostavne nabave), 14.12.2018.
35 Commission for Protection of Competition of the Republic of Serbia, Opinion on the Application
of Article 10 of the Law on Protection of Competition to Certain Forms of Cooperation between
Undertakings in Public Procurement Procedures (Srb: Примена члана 10. Закона о заштити
конкуренције на одређене облике сарадње између учесника на тржишту у поступцима
јавних набавки), 25.03.2021.

Nikola Ilić: CONSORTIA BIDDING IN THE SEE REGION: WHEN DOES COOPERATION... 81
[…].36 Additionally, even consortium agreements concluded between close com-
petitors are not considered restrictive if they cumulatively fulfil four preconditions.
Namely, competitors should not be able to bid independently nor “participate in
the public procurement procedure by presenting a separate joint bid”.37 Moreover,
the exchange of business-sensitive information between the competitors should be
limited to public procurement procedure purposes, and the consortia agreement
should not contain any non-compete provisions that restrict or prevent competi-
tion in other public procurements.38 According to this opinion, if a consortia
agreement satisfies all of these preconditions, it is not deemed restrictive.
Moreover, the Opinion specifies that consortia agreements will not be considered
restrictive even if one of the parties to that agreement can bid independently, while
the other undertakings “join to acquire the necessary references and know-how”.39
Finally, the Opinion clarifies that all other consortia agreements that do not meet
the listed conditions are restrictive and that parties to the said agreements can
file a request for an individual exemption from the prohibition under Article 12
of the Law on Protection of Competition (national equivalent to Article 101(3)
TFEU).40
Interestingly, the Serbian competition authority recently had the opportunity to
apply and evaluate the opinion in the Commission vs. Miteco-Kneževac et al. case.41
In this case, a consortium of five companies submitted a joint bid to provide
services for the permanent disposal of hazardous waste as part of a public procure-
ment organized by the Serbian Ministry of Environmental Protection. Among the
relevant facts of the case, the five companies engaged a certified laboratory to fulfil
all of the prescribed preconditions required under the public procurement proce-
dure. However, upon the investigation,42 the Serbian competition authority con-
36 Ibid., p. 1.
37 Ibid.
38 Ibid.
39 An additional precondition for the application of this exception is that “the said parties to the agree-
ment, namely those who join the agreement, cannot participate in the procurement procedure by
presenting a joint bid” (Ibid.).
40 Ibid.
41 Commission for Protection of Competition of the Republic of Serbia, Decision 4/0-01-30/2022-06,
13.07.2022.
42 Interestingly, in this case, the Serbian competition authority conducted a dawn raid. For a detailed
discussion of the legal framework governing dawn raids in Serbia, see: Begović B., Ilić, N., Nenajavljeni
uviđaj i (ne)srazmera između ovlašćenja i obaveza Komisije za zaštitu konkurencije, Pravni zapisi, Vol. 3,
No. 1, 2022, pp. 54–75; Begović B., Ilić, N., Dawn Raids and (Dis)Proportionality between the Powers
and Obligations of the Commission for Protection of Competition, Focus on Competition, 2022, pp.
32–46.

EU AND COMPARATIVE LAW ISSUES AND CHALLENGES SERIES ECLIC 8 – SPECIAL ISSUE
82
cluded that “[…] there was a possibility that individual members of the bidding
consortium could have formed a smaller group, while the remaining members, in
cooperation with an authorized laboratory, could have constituted another group,
thereby submitting a competitive offer “.43 As a result, the competition authority
deemed the consortium agreement to be restrictive, and all members of the bid-
ding consortium were fined.
Despite the decision being rendered more than a year after the issuance of the
opinion, the Serbian competition authority made no reference to the opinion,
nor did it assess whether the preconditions outlined in the opinion had been
fulfilled. Essentially, the competition authority concluded that the bidding con-
sortium constituted a restrictive agreement by the object (without conducting a
detailed analysis of the consortium’s effects on competition), and this conclusion
has been primarily based on the possibility that some consortium members could
have engaged another certified laboratory and submitted independent bid. More-
over, the competition authority did not offer any explanation regarding the pos-
sibility of consortium members submitting independent bids, as such a possibility
always exists – whether through engaging external companies and resources or
by expanding and improving their capacities over time. Finally, the competition
authority did not take into account the potential efficiencies associated with con-
sortium bidding, which may manifest as lower prices, enhanced quality, or faster
delivery of the services encompassed by the bidding process.44 In other words, in
this case, the competition authority concluded that the cooperation constituted
collusion or bid rigging, without clearly distinguishing between the two concepts.
5. CONCLUDING REMARKS
Consortia bidding undoubtedly constitutes a significant business practice that can
facilitate the execution of high-stake projects while generating considerable eco-
nomic efficiencies. erefore, consortia bidding may be particularly pertinent to
the SEE region and its economic development. However, to fully harness the po-
tential of consortia bidding, the SEE countries should effectively distinguish be-
tween consortia bidding and bid rigging, thereby differentiating pro-competitive
cooperation from anti-competitive collusion, and implement a harmonized, if not
unified, approach to consortia bidding under national competition laws.
43 Ibid., p. 3.
44 ese potential offsetting efficiencies are explicitly highlighted in the EC Guidelines and implicitly
acknowledged in the Romanian Guide. However, in contrast, the decision of the Serbian competition
authority makes no mention of the concept of “efficiency,” either explicitly or implicitly; See ibid., pp.
1–41.

Nikola Ilić: CONSORTIA BIDDING IN THE SEE REGION: WHEN DOES COOPERATION... 83
Based on the conducted analysis, and considering the economics of consortia bid-
ding, it is clear that the net effects of consortia bidding are highly contingent on
the specific circumstances of each case. Generally, when consortium members are
not capable of submitting individual bids, there is a greater likelihood that the
consortia bidding will yield positive or pro-competitive outcomes. Conversely,
this likelihood significantly diminishes when consortium members can submit
solo bids. Nevertheless, significant exceptions to these general expectations may
exist in both scenarios. erefore, the net effects of consortia bidding on competi-
tion should be carefully weighed on a case-by-case basis, relying upon in-depth
economic analysis. e most advanced competition law systems, including those
of the US and the EU, have progressively evolved and incorporated the rule of
reason approach to consortia bidding, enabling consortia members to rely upon
efficiency defence. is approach aligns with the insights derived from economic
(auction) theory, ensuring a more nuanced and economically grounded evaluation
of such practices. However, in the SEE region, significant disparities in the en-
forcement of competition law persist, highlighting variations in national practices
and administrative capacities.
e emerging trend of national competition authorities within the SEE region
to issue specific guidelines or opinions on consortia bidding could lead to a slip-
pery slope, where inconsistent or overly prescriptive regulations may undermine
legal certainty and distort competition across the region. is trend is particularly
concerning when some national competition authorities take the path of least resis-
tance by classifying consortia agreements as collusion or violations by object with-
out conducting a thorough economic analysis first. Such an approach risks over-
simplifying complex collaborative arrangements between market participants and
may lead to unjustified legal outcomes that stifle legitimate competitive behaviour.
erefore, it would be prudent and advisable for national competition authorities
in the SEE region to adopt the rule of reason approach, remaining open-minded
and focused on conducting rigorous economic analyses of both the pro-competi-
tive and anti-competitive effects of consortia bidding (in compliance with the EC
guidelines).
ACKNOWLEDGEMENT
is article originated within the University of Belgrade Faculty of Law research
project – Problemi stvaranja, tumačenja i primene prava (Issues in Creation, Inter-
pretation and Enforcement of Law), 2024; I am grateful to Boris Begović for his
valuable comments and insightful suggestions. Any remaining errors or shortcom-
ings remain the sole responsibility of the author.

EU AND COMPARATIVE LAW ISSUES AND CHALLENGES SERIES ECLIC 8 – SPECIAL ISSUE
84
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1. Law No. 9121 on the Protection of Competition (Al. Ligji nr. 9121 për Mbrojtjen e
Konkurencës), Official Gazette No. 6 of 2003, amended by Law No. 27/2016.
2. Competition Act (Bos. Zakon o konkurenciji), Official Gazette of BH No. 48/05.
3. Law on the Protection of Competition (Bul. Закон за защита на конкуренцията), State
Gazette No. 102/1998.
4. Competition Act (Cro. Zakon o zaštiti tržišnog natjecanja), Official Gazette No. 148/2005,
76/2007, 79/2009, 80/2013, 30/2014, 117/2018.
5. Law on Protection of Competition (Mne. Zakon o zaštiti konkurencije), Official Gazette
No. 36/2012.
6. Law on Protection of Competition (Mac. Закон за заштита на конкуренцијата), Official
Gazette No. 145/2010.
7. Law No. 21/1996 on Competition (Ro. Legea concurenței nr. 21/1996), Official Gazette
No. 15/1996.
8. Law on Protection of Competition (Srb. Закон о заштити конкуренције), Official Ga-
zette No. 51/2009, 95/2013.
9. Prevention of Restriction of Competition Act (Slo. Zakon o preprečevanju omejevanja
konkurence, ZPOmK-1), Official Gazette No. 36/2008, art. 6 and 9.

EU AND COMPARATIVE LAW ISSUES AND CHALLENGES SERIES ECLIC 8 – SPECIAL ISSUE
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10. Commission for Protection of Competition of the Republic of Serbia, Opinion on the Ap-
plication of Article 10 of the Law on Protection of Competition to Certain Forms of Coop-
eration Between Undertakings in Public Procurement Procedures (Serb. Примена члана
10. Закона о заштити конкуренције на одређене облике сарадње између учесника
на тржишту у поступцима јавних набавки), 25.03.2021.
11. Romanian Competition Council, Guide on Compliance with Competition Rules in the
Case of Participation in the Form of Association in a Public Procurement Procedure (Ro.:
Ghid privind respectarea regulilor de concurență în situația participării sub formă de aso-
ciere la o procedură de achiziție publică), 31.01.2017.
12. Judgment of the Court of 22 December 2016 in case E-3/16, Ski Taxi SA, Follo Taxi SA and
Ski Follo Taxidrift AS v. e Norwegian Government, represented by the Competition Authority,
OJ C 133/5, 27.4.2017
13. Commission for Protection of Competition of the Republic of Serbia, Decision No. 4/001-
30/2022-06, 13.07.2022.
14. e Croatian Competition Agency Rulebook on Implementing the Simplified Pub-
lic Procurement Procedure (Cro. Pravilnik o provođenju postupka jednostavne nabave),
14.12.2018.