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European Commission - Press release

Antitrust: Commission fines BEH Group € 77 million for blocking access to key natural gas infrastructure in Bulgaria

Brussels, 17 December 2018

The European Commission has fined Bulgarian Energy Holding (BEH), its gas supply subsidiary Bulgargaz and its gas infrastructure subsidiary Bulgartransgaz (the BEH group) €77 068 000 for blocking competitors' access to key gas infrastructure in Bulgaria, in breach of EU antitrust rules.

Commissioner Margrethe Vestager, in charge of competition policy, said: "Consumers in all Member States should enjoy the benefits of an integrated and competitive single European energy market. For years, Bulgarian natural gas consumers have been denied a choice of suppliers because the BEH group refused to give access to its gas infrastructure to other wholesale gas suppliers. With today's decision, we will promote the development of an open and competitive energy market to the benefit of consumers in Bulgaria, in line with Energy Union objectives."

BEH is the vertically integrated incumbent state-owned energy company in Bulgaria. One subsidiary, Bulgartransagaz, controls the gas infrastructure in Bulgaria. Another subsidiary, Bulgargaz, supplies gas to customers in Bulgaria.

The decision taken today finds that the BEH group holds dominant positions both in the gas infrastructure markets and in the gas supply markets in Bulgaria.

It also finds that BEH and its subsidiaries, abused their dominant positions by foreclosing entry into the gas supply markets in Bulgaria by unduly restricting access to the infrastructure it owned and operated. BEH used the dominant position of one subsidiary, Bulgartransgaz, to protect the near monopolistic position of its other subsidiary, Bulgargaz, on supplying gas. In addition, Bulgargaz hoarded capacity on the only import pipeline bringing gas through Romania to Bulgaria so that it could not be used by potential competitors.

Between 2010 and 2015, the BEH Group blocked the access to the following gas infrastructure:

  •         the domestic Bulgarian gas transmission network,
  •         the only gas storage facility in Bulgaria and
  •         the only import pipeline bringing gas into Bulgaria, which was fully booked by BEH.

Without access to this essential infrastructure, it was impossible for potential competitors to enter wholesale gas supply markets in Bulgaria. This prevented any development of competition and ensured a near monopoly for Bulgargaz.

The Commission concluded that this behaviour by the BEH group is in breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant market position. As a result, the Commission decided to impose a fine on the company.

Today's decision is another example of how enforcement of EU competition rules complements legislative action to ensure open and competitive gas markets in the EU, in line with the Energy Union objectives. In particular, the Commission has the objective of improving competition and the level of security of supply in Southeast European gas markets, including in Bulgaria.

The removal of barriers to entry for competitors will allow the Bulgarian wholesale gas market to function more efficiently, with more buyers and sellers, and give Bulgarian consumers better prices and a choice of gas suppliers. This will be further facilitated by the recent opening of the gas interconnector between Bulgaria and Greece, for which the Commission approved public support on 8 November 2018, and the Bulgaria–Romania–Hungary–Austria (BRUA) energy cooperation project that will enable Bulgarian wholesalers to diversify their supply sources.

Consequences of the decision

The Commission imposed a fine of €77 068 000 on BEH, Bulgargaz and Bulgartransgaz, which are jointly and severally liable for its payment.

The fine was set on the basis of the Commission's 2006 Guidelines on fines (see IP/06/857 and MEMO/06/256). In setting the level of fines, the Commission took into account the company's relevant sales in Bulgaria, the serious nature of the infringement and its duration.

 

Background

Bulgarian Energy Holding (BEH) is a State owned company active in the energy sector in Bulgaria. BEH controls several Bulgarian energy companies, including Bulgargaz, the main supplier of gas at the downstream wholesale level in Bulgaria and Bulgartransgaz the owner of the Bulgarian transmission network and the only storage facility in Bulgaria.

Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibits the abuse of a dominant position which may affect trade and prevent or restrict competition.

The Commission opened a formal investigation into BEH Group's behaviour on 4 July 2013, following an inspection carried out at BEH Group's premises in September 2011. The Commission issued a statement of objections on 23 March 2015, followed by a letter of facts.

More information on today's decision will be available under the case number AT.39849 in thepublic case register on the Commission's competition website once any confidentiality issues have been resolved.

 

Other cases

Today's decision forms part of the Commission's efforts to improve competition between gas suppliers and security of supply in South-eastern Europe to ensure open and competitive gas markets, in line with the Energy Union objectives. In May 2018, the Commission adopted a decision imposing binding commitments on Gazprom which ensures free flow of gas on the upstream level in the region (AT.39816). Furthermore, the Commission has an ongoing investigation concerning Romanian transmission system operator Transgaz for potential export restrictions of gas (AT.40335).

In a separate case concerning BEH, the Commission adopted in December 2015 a decision rendering legally binding the commitments offered by BEH to end competition restrictions on Bulgaria's wholesale electricity market.

 

Action for damages

Any person or company affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the EU countries and seek damages. The case law of the Court and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission decision that has become final constitutes binding proof that the behaviour took place and was illegal. Even though the Commission has fined the cartel participants concerned, damages may be awarded without being reduced on account of the Commission fine.

The Antitrust Damages Directive, which Member States had to implement in their legal systems by 27 December 2016, makes it easier for victims of anti-competitive practices to obtain damages. More information on antitrust damages actions, including a practical guide on how to quantify antitrust harm, is available here.

 

Whistle-blower tool

The Commission has set up by a tool to make it easier for individuals to alert about anti-competitive behaviour while maintaining their anonymity. The new tool protects whistle-blowers' anonymity through a specifically-designed encrypted messaging system that allows two way communications. The tool is accessible via this link.

IP/18/6846

Press contacts:

General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email


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