The European Commission has fined Bulgarian Energy Holding (BEH), its gas supply subsidiary Bulgargaz and its gas infrastructure subsidiary Bulgartransgaz (the BEH group) €77 068 000 for blocking competitors' access to key gas infrastructure in Bulgaria, in breach of EU antitrust rules.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Consumers in all Member States should enjoy the benefits of an integrated and competitive single European energy market. For years, Bulgarian natural gas consumers have been denied a choice of suppliers because the BEH group refused to give access to its gas infrastructure to other wholesale gas suppliers. With today's decision, we will promote the development of an open and competitive energy market to the benefit of consumers in Bulgaria, in line with Energy Union objectives."...
BEH is the vertically integrated incumbent state-owned energy company in Bulgaria. One subsidiary, Bulgartransagaz, controls the gas infrastructure in Bulgaria. Another subsidiary, Bulgargaz, supplies gas to customers in Bulgaria.
The decision taken today finds that the BEH group holds dominant positions both in the gas infrastructure markets and in the gas supply markets in Bulgaria.
The decision taken today finds that the BEH group holds dominant positions both in the gas infrastructure markets and in the gas supply markets in Bulgaria.
It also finds that BEH and its subsidiaries, abused their dominant positions by foreclosing entry into the gas supply markets in Bulgaria by unduly restricting access to the infrastructure it owned and operated. BEH used the dominant position of one subsidiary, Bulgartransgaz, to protect the near monopolistic position of its other subsidiary, Bulgargaz, on supplying gas. In addition, Bulgargaz hoarded capacity on the only import pipeline bringing gas through Romania to Bulgaria so that it could not be used by potential competitors.Between 2010 and 2015, the BEH Group blocked the access to the following gas infrastructure:
- the domestic Bulgarian gas transmission network,
- the only gas storage facility in Bulgaria and
- the only import pipeline bringing gas into Bulgaria, which was fully booked by BEH.
Without access to this essential infrastructure, it was impossible for potential competitors to enter wholesale gas supply markets in Bulgaria. This prevented any development of competition and ensured a near monopoly for Bulgargaz.
The Commission concluded that this behaviour by the BEH group is in breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant market position. As a result, the Commission decided to impose a fine on the company.
Today's decision is another example of how enforcement of EU competition rules complements legislative action to ensure open and competitive gas markets in the EU, in line with the Energy Union objectives. In particular, the Commission has the objective of improving competition and the level of security of supply in Southeast European gas markets, including in Bulgaria.
The removal of barriers to entry for competitors will allow the Bulgarian wholesale gas market to function more efficiently, with more buyers and sellers, and give Bulgarian consumers better prices and a choice of gas suppliers. This will be further facilitated by the recent opening of the gas interconnector between Bulgaria and Greece, for which the Commission approved public support on 8 November 2018, and the Bulgaria–Romania–Hungary–Austria (BRUA) energy cooperation project that will enable Bulgarian wholesalers to diversify their supply sources.
Consequences of the decision
The Commission imposed a fine of €77 068 000 on BEH, Bulgargaz and Bulgartransgaz, which are jointly and severally liable for its payment.
The fine was set on the basis of the Commission's 2006 Guidelines on fines (see IP/06/857 and MEMO/06/256). In setting the level of fines, the Commission took into account the company's relevant sales in Bulgaria, the serious nature of the infringement and its duration.
