At the end of March 2014 the Competition Protection Commission announced that it had presented a statement of objection to Bulgargas EAD. Bulgargas has a seat in Bulgaria and is controlled by the state through Bulgarian Energy Holding EAD. Bulgargas is the only company in Bulgaria licensed as a public supplier of natural gas in the country.
In the statement of objection the commission claimed that Bulgargas had abused its dominant position in the natural gas supply market by imposing unfair trade conditions in the contracts for public supply with its customers between August 2 2010 and December 31 2012, which harmed competition and consumer interest.
According to the commission, Bulgargas had unilaterally forced its customers to prolong the terms of their contracts without negotiations or discussions of their provisions. Further, Bulgargas had obliged its customers to declare their natural gas requirements for the next year according to formulas which were developed by Bulgargas in certain guidelines and tables. The commission concluded that the application of the formulas led to unjustified increases in the gas quantities that consumers declared for the following year. This could result in the non-fulfillment of the consumers' obligation to accept all required quantities. In addition, Bulgargas imposed other obligations on consumers in the contracts for natural gas supply without providing them with reciprocal rights.
The commission held that Bulgargas's market behaviour was exploitative towards its customers (eg, end-suppliers and consumers) because there was no alternative public supplier and customers were thus forced to continue business relations with Bulgargas. If consumers did not accept the obligations imposed by Bulgargas their contracts could be terminated, which would disqualify them from their right to a continuous supply of natural gas.
Bulgargas has 30 days in which to oppose the statement of objection or to propose its commitments. The period should expire by the end of April, depending on when the statement of objection was presented to Bulgargas.
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.
