CCA opinion concerning the Public tender for the lease of public areas of the City of Dubrovnik

The Croatian Competition Agency (CCA) issued an opinion regarding the Public tender for the lease of public areas in the City of Dubrovnik. By means of this opinion, the CCA analysed the provisions of the Public Tender in the sense of competition law.

In public tender procedures conducted by units of local and regional self-government, including the City of Dubrovnik, it is often found that certain tender conditions, when assessed in light of competition law, constitute a breach of the principles of market competition — namely, where the conditions are defined in an excessive, restrictive, or discriminatory manner, thereby producing effects on competition in the relevant market.

From the standpoint of competition law, the CCA considers that every undertaking must have free and equal access to the public tender procedure, as this represents a fundamental element of entrepreneurial freedom and a market-based economy.

Accordingly, in this case, the CCA assessed that the provision of item 4 paragraph 2 of the Public Tender is in contravention with the principle of market competition. It reads as follows:

“The bidders for information stands (under item D.) may be legal or natural persons who are owners of vessels, who meet the statutory conditions for performing the activity of passenger transport at sea, who perform this activity from the Old Port, and whose port of registration of the vessel/ship with which the activity will be performed is Dubrovnik.”

The CCA found that this provision restricts access to the tender for a specific group of undertakings based on a geographical criterion (the port of registration of the vessel), thereby undermining the equality of the bidders and preventing competition under equal conditions.

The CCA therefore proposed that this provision be amended so that the tender conditions are defined exclusively on the basis of professional, technical, and expert criteria, in accordance with the special regulations governing the performance of the specific activity — irrespective of the lawful means by which the assets used for the activity (vessels) have been acquired, and irrespective of the bidder’s seat or other geographical characteristics, specifically the port of registration of the vessel or ship used for the activity.

In its submitted statement, the City of Dubrovnik noted that, within the scope of its self-governing authority, it performs tasks of local significance and, accordingly, has the right to determine tender conditions, explaining that certain conditions were introduced on the basis of previous negative experience with individual bidders.

However, the CCA emphasises that, although the units of local and regional self-government are entitled to regulate matters within their self-governing competence, such actions must nevertheless be aligned with competition rules, which are of mandatory nature. This ensures equal and transparent access to the market for all undertakings.

The tender conditions must therefore be defined so as to ensure compliance solely with professional, technical, and expert criteria, in accordance with the special regulations governing the performance of the specific activity, regardless of the lawful means of acquiring the assets used for the activity, and must not restrict access to the tender or to the market in a manner that could adversely affect competition.

In conclusion, the CCA has emphasised that the objectives of market regulation — including the management of public areas — must be harmonised with the principles of market competition, in order to ensure effective competition, benefits to end users, and transparent and equitable management of public resources.

The full opinion of the CCA in the Croatian language can be accessed at the following link