The Competition Protection Act (ZZK) aims to ensure the protection and conditions for competition development and free initiative in business. It provides for protection against agreements, decisions and collusive practices, and the abuse of monopolistic or dominant positions in the market. It also regulates control over concentrations of enterprises, and relations with respect to the implementation of the EU Treaty and Council Regulations on the implementation of the rules of competition and control of concentrations of enterprises.
Prohibited agreements, decisions and concerted practices
The Competition Protection Act (ZZK) prohibited any form of agreement among undertakings, decisions by undertaking groupings, as well as any concerted practices by two or more undertakings, which intend or result in preventing, restricting or destroying competition in a given market, such as:
- directly or indirectly fixing purchase or selling prices or any other trading conditions;
- sharing markets or sources of supply;
- limiting or controlling production, markets, technical development, or investment;
- applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
- making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
All decisions and agreements of this kind are void.
Abuse of a monopolistic or dominant position
The law prohibits any behaviour of enterprises with a monopolistic or dominant position, or of two or more enterprises with a combined dominant position which may prevent, restrict or disrupt competition and affect the interests of consumers. For example:
- directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
- limiting production, markets or technical development to the prejudice of consumers;
- applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive advantage;
- making the conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection to the subject of such contracts;
- unreasonable denial to supply goods or services to an actual or potential client in order to obstruct the client's business activities.
Any action or omission when conducting a business activity is prohibited if it is contrary to conscientious commercial practice and harms, or is likely to harm, competitors' interests. For example:
- damaging the reputation of a competitor;
- providing misleading information;
- misleading and comparative advertising;
- unfairly taking customers;
The state may, in some circumstances, provide aid to persons or enterprises if this does not undermine fair competition. The rules for state aid are set out in the State Aid Act (ZDP). Aid may be provided where:
- it helps the economic development of regions with low standards of living or high levels of unemployment;
- it assists projects of major economic interest to the European Union or helps to overcome some of the major economic problems in Bulgaria;
- it promotes the development of certain commercial activities or encourages specific economic regions, provided that this does not disrupt business conditions to an extent that runs counter to the public interest;
- it helps protect cultural and historical heritage, provided that it does not run counter to the public interest;
- it has been authorised by a decision of the Council and has been passed by a qualified majority based on a proposal by the European Commission.
National competition bodies
The Competition Protection Commission (CPC) is the body authorised to enforce the Competition Protection Act (ZZK). The CPC is the Bulgarian watchdog responsible for the implementation of Community law in the field of competition. The CPC:
- detects violations of the Competition Protection Act (ZZK) and Articles 81 and 82 of the Treaty Establishing the European Community;
- imposes the sanctions stipulated by the law;
- issues permits as required by law;
- may issue injunctions in cases provided for in the law;
- approve undertakings by businesses or impose measures to re-establish competition in respect of enterprises subject to investigation under the ZZK or Article 81 and 82 of the Treaty Establishing the European Community;
- can order companies to stop further infringements, and enforce this by imposing relevant restrictions on their behaviour, and/or structural measures to reinstate competition; and etc.;
Strict provisions govern company mergers
The Competition Protection Commission is the body authorised to assess concentrations of economic activity.
If any operation constitutes a concentration, it must be notified to the Competition Protection Commission, unless it is within the competence of the European Commission. Concentrations that fall within the scope of control over concentrations of enterprises at EU level are within the sole competence of the European Commission.
Enterprises must inform the commission of a concentration after having concluded an agreement, publishing an invitation to tender or acquiring control, but prior to real action being taken to implement the transaction.
Notifications of concentrations must be submitted jointly by the enterprises being merged or absorbed, jointly established or acquiring joint control, and by persons acquiring sole control.
Measures to assess a concentration are launched within three days of receipt of the notification by the Competition Protection Commission or after all the necessary documentation has been submitted.
A notification is announced via the Commission's e-register, allowing any interested parties to submit information or their opinions on the effect the concentration will have on the market in question.
If an enterprise has grounds to believe that another enterprise is breaking competition rules, it may apply to the Competition Protection Commission requesting that the infringement be established and to impose sanctions.
Submission of notifications, requests and complaints off infringements of the Competition Protection Act (ZZK), the Public Procurement Act (ZOP) and the Concessions Act (ZK) can also be done via the Competition Protection Commission's website.
The Commission charges fees under the Competition Protection Act (ZZK), the Public Procurement Act (ZOP) and the Concessions Act (ZK).