site.btaBrussels Sends Statement of Objections to Bulgarian Energy Holding for Suspected Abuse of Dominance on Wholesale Electricity Market

Brussels, August 12 (BTA) - The European Commission said Tuesday it has informed the Bulgarian Energy Holding (BEH) of its preliminary view 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.

The Commission has concerns that BEH, the incumbent state-owned vertically-integrated energy company in Bulgaria, might be hindering competition on the non-regulated wholesale electricity market in Bulgaria by imposing restrictions on where the electricity supplied by BEH may be resold.

The Commission has found that a majority of electricity supply contracts between BEH and traders stipulate that electricity supplied by BEH may only be resold within Bulgaria or may only be exported. The contracts also contain control and sanctioning mechanisms which allow BEH to monitor and punish customers who fail to comply with these territorial restrictions.

The Commission's provisional finding is that these territorial restrictions constitute an abuse of BEH's dominant market position, which is prohibited by Article 102 of the Treaty on the Functioning of the European Union (TFEU).

The Commission opened formal proceedings to investigate whether BEH may be abusing its market dominance in the wholesale electricity market in Bulgaria on 27 November 2012.

In a separate investigation (opened July 2013), the Commission is investigating whether BEH, its gas supply subsidiary Bulgargaz and its gas infrastructure subsidiary Bulgartransgaz might be hindering competitors from accessing key gas infrastructures in Bulgaria, in breach of EU antitrust rules.

A statement of objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The addressees can examine the documents in the Commission's investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. The Commission takes a final decision after the parties have exercised their rights of defence. If, after the parties have exercised their rights of defence, the Commission concludes that there is sufficient evidence of an infringement, it can issue a decision prohibiting the conduct and impose a fine of up to 10 per cent of a company's annual worldwide turnover.