March 25 2010
Following a quiet period, public enforcement of competition rules gained momentum in 2007 and 2008 as the Commission for Protection of Competition initiated an array of cartel investigations and imposed record-breaking fines on undertakings for infringing competition rules.
During 2007 and 2008 the commission conducted six cartel investigations in different sectors. Following five of the investigations the commission imposed fines for price fixing and the exchange of sensitive commercial information. Two of these decisions were upheld and are now binding. The first concerned the commission's decision in the insurance sector whereby it imposed a €1 million fine (the highest fine ever imposed and the maximum possible fine under the competition legislation then in place) on 14 Bulgarian insurance companies and the Bulgarian Association of Insurance Companies for signing a memorandum within the association purporting to fix prices. Second, at the start of 2010 the commission's decision to impose fines totalling €12,500 on two Bulgarian associations of milk producers for price-fixing and unfair trade conditions was upheld. Other decisions (eg, the commission's decisions in the vegetable oil and bread sectors) were overturned, mainly because the commission failed to provide sufficient evidence of wrongdoing. The proceedings are now pending before the appellate body of the Supreme Administrative Court.
It will be interesting to see the effect of the court's decisions on the commission's resolve to battle cartels. On the one hand, the commission's most important decision was upheld. On the other hand, several decisions were overturned due to a lack of evidence. It remains to be seen whether this means that future cartel investigations will be more detailed – and longer – to enable the commission to compile a solid base of evidence. Another possibility is that recent events will encourage the commission to commence only investigations that it is convinced will uncover sufficient evidence. This, in turn, could lead to the instigation of fewer investigations. However, the possibility remains that the commission will not be affected and will continue its increased enforcement of competition rules.
For further information on this topic please contact Ilko Stoyanov 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@example.com).
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