Fine for abuse of dominant position in energy sector

At the beginning of May 2013 the Competition Protection Commission announced that it had imposed a fine of Lev1,687,484 (approximately €862,797) on Energo-Pro Sales AD - the exclusive end supplier of electricity in Northeast Bulgaria - for abuse of its dominant position, which qualified as violation of the Competition Protection Act. The commission held that in this case Article 102 of the Treaty on the Functioning of the European Union was not applicable.

According to the commission, Energo-Pro abused its dominant position by terminating the electricity supply to one of its customers, Water Supply and Drainage Systems AD, Dobrich - a local utility company which supplies water to end consumers in Northeast Bulgaria - due to non-payment of due amounts for electricity used. The commission held that the non-payment did not justify termination of the electricity supply. The commission pointed out that Water Supply and Drainage Systems had signed a commercial settlement protocol with Energo-Pro, but was nevertheless not in a position to pay the due amounts. The commission argued that before terminating the electricity supply, Energo-Pro should have considered the factors which had led to the situation, as well as Water Supply and Drainage Systems's conscientiousness to pay its debts.

Further, the commission emphasised that under the Energy Act, energy companies must conduct their business in the interests of customers and society. In this case, the commission considered that the extreme measure of terminating supply should not have been taken, given the social importance of the services provided by Water Supply and Drainage Systems. The commission held that by terminating the electricity supply, Energo-Pro had restricted unjustifiably the business activity of Water Supply and Drainage Systems in the downstream market.

The decision is one of a series measures recently undertaken by the commission in the energy sector in order to improve the competitive environment.

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 (i.stoyanov@schoenherr.bg or m.papazova@schoenherr.bg).