20 years together

Тhe Commission for Protection of Competition with heavy sanctions for non-cooperation during investigations

15 October 2018

The sanction imposed on Speedy AD by the Commission for Protection of Competition (CPC) for not providing thorough and accurate information in relation to the acquisition of Rapido Express and Logistics OOD has reminded of the considerable sanctioning powers the Commission has. In this particular case, the sanction imposed on Speedy AD is within a concentration procedure. Although it has been set at an amount close to the statutory minimum (0.2% of the company’s turnover), as an absolute value (BGN 205,622), this is one of the highest sanctions ever imposed for non-cooperation.  

The CPC has normally had recourse to the said sanctioning powers when investigating allegations for violations of the competition rules so as to ensure full and comprehensive analysis on the case. This brings forward CPC as disciplinarian not only when investigating potential violations of the competition regulations but also in any other case, when the lack of complete and comprehensive information impedes the analysis of the relevant market and the impact of the participants’ activity on the market structure.

In this regard, it is worth mentioning the sequence of sanctions imposed by the Commission during the last year related to con-cooperation during dawn raids. In June 2018 the Commission for Protection of Competition issued a decision imposing a sanction in the amount of BGN 30,000 to an investigated undertaking for a violation of the obligation to cooperate with the CPC officials during a dawn raid. In the said case, the conduct of the inspected company has been qualified as a serious violation justifying the high amount of the sanction.

The sanction came after an inspection carried out in April this year within proceedings initiated to investigate a potential violation under Art. 15 of the Competition Protection Act (CPA), being one of the most serious infringements of the antitrust rules of fair competition - fixing of resale prices.

The decision states that the employees of the inspected company have committed a series of violations of the CPA by not allowing the regulator’s officials to exercise their powers to access and review e-mail correspondence and digital information on the company’ servers as well as to seize documentation and information. The company thus failed to ensure timely and full access to corporate information and correspondence, including the manager’s computer and e-mail account.

In addition, the Commission has taken into account several aggravating circumstances, including prevention of access to data on specific business relationships with key customers and major trading partners. 

Given the nature and scope of the violation, the Commission has determined a sanction amounting to the maximum legal limit of 1% of the total turnover of the company. The CPC decision is currently being appealed before the Supreme Administrative Court.

The Commission’s decision on this case illustrates the trend in the authority’s work for carrying out dawn raids more frequently and for imposing sanctions on those hindering the inspections. A year ago, in a similar case the CPC imposed a sanction close to the maximum legal limit on another company in relation to an investigation for collusive agreements in the market of energy audits and preparation of technical passports. In this case the employees of the investigated undertaking attempted to prevent access to documents, email correspondence and other commercial data.

All circumstances concerning the imposed sanctions indicate that the companies should not underestimate the powers of the Commission when carrying out the investigation during any proceeding, including in relation to dawn raids. The potential negative consequences that a refusal to cooperate with the regulatory authority could bring should be additionally taken into consideration. Apart from that, introducing rules of conduct for company’s employees in cases of dawn raids is a good practice that could mitigate the risks of sanctions.






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