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Bulgarian Energy Holding fined by EC for abuse of dominant market position

19 December 2018

By its decision of 17th December, 2018, the European Commission has imposed a fine of EUR 77,068,000 on the Bulgarian Energy Holding EAD (BEH), its gas supply subsidiary Bulgargaz EAD and its gas infrastructure subsidiary Bulgartransgaz EAD. The fine has been imposed for blocking competitors’ access to key gas infrastructure in Bulgaria in breach of Art. 102 of the Treaty on the Functioning of the European Union (TFEU).

In its decision, the European Commission finds that BEH and its subsidiaries abused their dominant positions in the gas transmission and supply market between 2010 and 2015. BEH used Bulgartransgaz EAD’s dominant position in relation to the infrastructure it owns and manages in order to restrict the competitors’ access to it. This ensured almost a monopoly position for the other BEH subsidiary - Bulgargaz EAD, in terms of gas supplies to consumers. In addition, Bulgargaz EAD hoarded capacity on the only import pipeline bringing gas through Romania to Bulgaria which further prevented potential competitors from using this infrastructure.

The natural gas transmission and supply market in Bulgaria was liberalised back in 2007, when obligation to ensure equal access to new entrants to the networks and the market was introduced. In practice, however, until 2013, when Overgas Inc. AD started supplying natural gas at freely negotiated prices, the only suppliers were the two BEH subsidiaries. The European Commission finds that the lack of access to key infrastructure does not allow potential competitors to enter the natural gas transmission and supply market in Bulgaria.

The imposed fine is aimed at removing the barriers to entry for competitors which would allow the Bulgarian gas market to function more efficiently, with increased number of buyers and sellers, as well as to provide the Bulgarian consumers with better prices and a choice of gas suppliers.

The Commission’s decision would allow any person affected by the violation to bring the matter before the courts of the EU Member States and claim damages. In such proceedings, the entered into force decisions of the European Commission or the national competent authorities will be binding for the national court and will constitute binding proof that the violation took place.

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