Commission accuses electricity distributors of abuse of dominant position

In May 2014 the Competition Protection Commission accused Bulgaria's three energy distributors – CEZ Distribution Bulgaria AD, EVN Bulgaria Electricity Distribution EAD and Energo-pro Nets AD – of abuse of dominant position. According to the commission, the three companies determined and imposed unjustified high prices for access to their low-voltage distribution networks for television, internet and telephone services, by which they restricted competition on the relevant markets.

The commission found that there was no alternative to these low-voltage distribution networks, which is why the three companies have a dominant position.

The electricity distribution companies own the low-voltage distribution networks and use them to conduct their main business activity (electricity distribution). In addition, the companies rent their networks for purposes such as the distribution of television, internet and telephone services. The costs of maintaining these networks are covered by the companies' main business activity. Thus, the additional activities generate additional costs which are directly related to this activity.

At the end of the first phase of its investigation, the commission concluded that the electricity distributors did not determine the prices charged on the basis of cost. The companies reported similar costs for their main business activity (electricity distribution) and for the additional activities (rent of the networks). Thus, the costs of the main activity were included in the calculation of the rent prices, which unjustifiably increased the latter. This is why the commission found the rent prices of the three companies to be high and exploitative.

The electricity distributors had 30 days to object the commission's statement of objection.

For further information on this topic please contact Ilko Stoyanov or Mariya Papazova at Advokatsko Druzhestvo Andreev Stoyanov & Tsekova in cooperation with Schönherr Rechtsanwälte GmbH by telephone (+359 2 933 1072), fax (+359 2 986 1105) or email ([email protected] or [email protected]). The Advokatsko Druzhestvo Andreev Stoyanov & Tsekova website can be accessed at www.schoenherr.eu.