On 12 August 2014 the European Commission sent Statement of Objections to the Bulgarian Energy Holding (BEH) for suspected abuse of dominance position on the Bulgarian wholesale electricity market. Its preliminary view is that territorial restrictions on resale contained in BEH's electricity supply contracts with traders on the non-regulated Bulgarian wholesale electricity market may breach EU antitrust rules. Such restrictions limit purchasers' freedom to choose where to resell the electricity bought from BEH.
Focusing on territorial restrictions
BEH is the incumbent state-owned vertically integrated energy company in Bulgaria. The majority of its supply contract with traders contains provisions that impose restrictions on where BEH’s electricity may be resold. In particular, electricity supplied by BEH may only be resold within Bulgaria or may only be exported. Moreover, BEH via control and sanctioning mechanism is able to monitor and punish customers for failure to comply with such territorial restrictions.
In the Statement of Objection the European Commission takes the view that such practices may be hindering competition on the non-regulated wholesale electricity market in Bulgaria, and constitute an abuse of dominant position. Therefore, these territorial restrictions are likely to be violating Article 102 of the Treaty on the Functioning of the European Union, which prohibits the abuse of a dominant market position, which may affect trade between Member States.
If the European Commission establishes that there is sufficient evidence of an infringement, it will issue a decision prohibiting the conduct and impose a fine of up to 10 % of a company’s annual worldwide turnover.
The European Commission opened formal proceedings to investigate the potential abuse of the market position on 27 November 2012. Sending a statement of objections constitutes a formal step in European Commission investigation into suspected violation of Article 102 TFEU by BEH. BEH can now examine the documents in the investigation file, reply in writing and request an oral hearing to present its comments before the European Commission. Following that, the European Commission will take its final decision.
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