Competition law in Bulgaria: overview

A Q&A guide to competition law in Bulgaria.

The Q&A gives a high level overview of merger control, restrictive agreements and practices, monopolies and abuse of market power, and joint ventures. In particular, it covers relevant triggering events and thresholds, notification requirements, procedures and timetables, third party claims, exclusions and exemptions, penalties for breach, and proposals for reform.

To compare answers across multiple jurisdictions visit the Competition Country Q&A tool.

This Q&A is part of the multi-jurisdictional guide to competition and cartel leniency. For a full list of jurisdictional Q&As visit www.practicallaw.com/competition-mjg.

For a full list of jurisdictional Cartel Leniency Q&As, which provide a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities in multiple jurisdictions, visit www.practicallaw.com/leniency-mjg.

Milen Rusev and Vesela Angelova Kabatliyska, Dinova Rusev and Partners Law Office
Contents

Merger control

1. What (if any) merger control rules apply to mergers and acquisitions in your jurisdiction?

Regulatory framework

Mergers and acquisitions (concentrations of economic activity) are subject to merger control in Bulgaria. The following legislation regulates the area:

  • Act on Protection of Competition (APC).

  • Code of Administrative Procedure.

  • Secondary legislation and internal rules of the Commission for Protection of Competition (CPC), consisting of:

    • its organisational rules;

    • the filing fee tariff for notification of transactions;

    • its rules on how documents concerning production, trade or other secrets protected by law can be used, accessed and kept;

    • its methodology for investigating and determining market position;

    • its methodology for the determination of fines;

    • the CPC-approved notification form and the guidelines for submitting the form.

Regulatory authority

The CPC is responsible for merger control (see box, The regulatory authority). Decisions made by the CPC can be appealed to the Supreme Administrative Court (SAC) (see Question 10).

Triggering events/thresholds

2. What are the relevant jurisdictional triggering events/thresholds?

Triggering events

The merger control regime applies to concentrations, which occur when a change of control on a lasting basis results from (Article 22, APC):

  • The merger of two or more previously independent undertakings or parts of undertakings.

  • The acquisition of direct or indirect control of the whole or parts of one or more undertakings by one or more other undertakings (or by one or more persons) that already control at least one other undertaking. The acquisition of direct or indirect control can occur by the purchase of shares, securities or assets, or in any other way.

  • The establishment of a joint venture performing on a lasting basis all functions of an independent economic entity (see Question 37).

Thresholds

Concentrations must be notified if the aggregate turnover in Bulgaria of all undertakings participating in the transaction exceeds BGN25 million for the preceding financial year and either:

  • Each one of at least two undertakings participating in the transaction had a turnover in Bulgaria exceeding BGN3 million in the preceding financial year.

  • The undertaking(s) being acquired had a turnover of more than BGN3 million in the preceding financial year.

Notification

3. What are the notification requirements for mergers?

Mandatory or voluntary

Notification is mandatory if the relevant thresholds are met (see Question 2).

Timing

Notification must be made before any implementation of the relevant transaction and after one of the following:

  • Conclusion of the contract. The contract can be, for example, a share purchase agreement, merger contract, and so on. Usually, this is a binding contract where one of the conditions precedent would be obtaining a clearance from the CPC.

  • Public announcement of a bid.

  • Acquisition of control in any other way.

The CPC may, exceptionally, accept for assessment a concentration notification at an earlier stage where the participating parties have provided strong evidence of their intention to carry out the transaction, or announced in advance their intention to launch a public tender offer (Article 24(2), APC).

In practice, the notification process for a concentration would normally take up to two months from the initial filing date, unless the CPC decided to open an in-depth investigation. Therefore, there would be a gap between the date of conclusion of a contract leading to a concentration of economic activity and the moment when the concentration may be implemented.

Formal/informal guidance

The parties to the transaction can obtain guidelines on how to complete the notification form. These guidelines are published on the CPC's website (see box, The regulatory authority).

Responsibility for notification

Notification must be made by:

  • All merging undertakings in case of a merger.

  • The party acquiring control in the case of an acquisition of sole or joint control.

Relevant authority

Notification must be made to the CPC.

Form of notification

There is a CPC approved notification form in Bulgarian, which specifies required content and attachments. This can be downloaded from the CPC website (see box, The regulatory authority). Any attachments to the form should be translated into Bulgarian and certified if necessary.

Filing fee

The filing fee is BGN2,000. A further fee is payable on clearance of the transaction; this amounts to 0.1% of the aggregate turnover of all participating undertakings in the preceding year, up to a maximum fee of BGN60,000.

Obligation to suspend

Following notification, the transaction must be suspended until the CPC makes its final decision. However, this obligation does not apply if the CPC has been notified without delay and either:

  • A person or undertaking buys securities in a tender offer or series of transactions, and the acquired securities have no voting rights (apart from rights to preserve the value of those securities).

  • The notifying party has requested that they be allowed to complete the concentration pending the outcome of the investigation, based on relevant provisions of the Code of Administrative Procedure (in practice, the CPC deals with such requests when it makes its decision on the merits of the notification). This means that the merger may be implemented after the CPC clearance even if an interested party has appealed the clearance decision before the SAC (see Question 10, Third party rights of appeal).

Procedure and timetable

4. What are the applicable procedures and timetable?

Phase I investigation

The CPC commences its investigation within three days of submission of a complete notification (if any required information and/or documents are missing, the CPC advises the parties of this, and gives them seven days to submit additional material).

The notification is published on the CPC website within seven days of the start of the investigation.

The CPC's investigation must be completed within 25 working days. This can be extended by ten days where the notifying parties propose changes to the concentration.

At the conclusion of its investigation, the CPC either:

  • Clears the transaction (this can be subject to conditions).

  • Announces that it will undertake an in-depth investigation, which must begin within 14 days of this announcement.

Phase II in-depth investigation

The CPC publishes a notice of opening an in-depth investigation in the CPC's electronic register. Interested third parties are entitled to submit information or statements regarding the expected effect of the concentration on the relevant markets within 30 days from the date of publication notice. Interested third parties can submit a reasoned request to be joined to the proceedings within 30 days from the date of publication notice.

During the in-depth investigation, the CPC's experts working on the investigation must prepare a report and submit it to the CPC member appointed to monitor the case. The monitoring CPC member informs the CPC Chairman and the Chairman convenes the CPC in a closed session where the CPC either:

  • Clears the concentration.

  • Issues a preliminary ruling on the expected effects of the concentration, where the substantive test is met (see Question 7).

Where the CPC issues a preliminary ruling, it notifies it to the applicants and any joined interested parties. The applicants and joined interested parties have at least 14 days to submit opinions on the preliminary ruling (Article 85(3), APC). At the expiry of the deadline for submission of statements the CPC holds a hearing of the applicants and the interested parties. The hearing should be held at least 14 days after the deadline for submission of statements. The CPC also holds a closed session and makes a decision within 14 days following the closed session (Article 60(2), APC). In that closed session, the CPC decides whether to:

  • Clear the concentration, with or without conditions, where the transaction will have certain positive effects (see Question 7).

  • Prohibit the concentration.

The in-depth investigation must be completed within four months from the date of notice of publication. If the matter is technically complex, this period can be extended by an additional 25 working days. If the parties propose remedies for clearance of the transaction the investigation deadline can be extended by a further 15 days. The parties can propose remedies for clearance at any time.

The decision must be published in the CPC's electronic register within 14 days of its announcement (see Question 5).

The above procedure and timetable also apply to investigations undertaken by the CPC on its initiative.

For an overview of the notification process, see flowchart, Bulgaria: merger notifications.

Publicity and confidentiality

5. How much information is made publicly available concerning merger inquiries? Is any information made automatically confidential and is confidentiality available on request?

Publicity

The CPC maintains a public electronic register which publishes non-confidential versions of the following documents and information on concentrations under investigation (Article 68, APC):

  • Announcement of the commencement of an investigation by the CPC.

  • Any decision of the CPC:

    • that determines that a notified transaction does not fall within the legally defined scope of a concentration;

    • that clears a concentration if either:

      • it does not meet the substantive test (see Question 7); or

      • it meets the substantive test but the CPC decides to clear it in any case (see Question 7).

    • that clears a concentration subject to certain conditions;

    • to begin an in-depth investigation into a concentration;

    • that prohibits a concentration.

Other documents and information collected during the investigation are available to the participants in the concentration and any other interested third parties in the CPC's offices.

Procedural stage

A notice by the CPC to begin an investigation is published within seven days of the start of the proceedings.

The CPC's decisions (see above, Publicity) should be published in the electronic register within 14 days of their making.

Automatic confidentiality

The CPC automatically keeps the following information confidential:

  • Its internal documentation on the investigation.

  • Information deemed confidential by law, such as personal information on individuals (under the Personal Data Protection Act), classified information (under the Classified Information Protection Act) and so on.

Confidentiality on request

A party providing required information to the CPC can request that certain information be kept confidential. The request should only relate to information about production and commercial secrets (for example, technical or financial information, know-how, production processes, market shares, marketing plans and so on). Reasons for the request should be provided, including an explanation of why the information is confidential and how its disclosure will damage, for instance, the relevant undertaking, its employees and so on.

Rights of third parties

6. What rights (if any) do third parties have to make representations, access documents or be heard during the course of an investigation?

Representations

Once the CPC has published a decision to commence a Phase I investigation, interested third parties have seven days to submit written opinions or information regarding the likely effects of the concentration (see Question 4, Phase I investigation).

Where the CPC opens Phase II in-depth investigations third parties can submit statements and/or information within 30 days following the publication of the CPC notice. Within this 30-day period, the CPC can also join an interested third party to the proceedings, based on a reasoned request from that third party (see Question 4, Phase II in-depth investigation).

Joined third parties can submit opinions on the preliminary ruling.

Document access

The CPC's investigation file can only be accessed by the parties to the concentration and interested third parties who have been added as parties to the investigation proceedings. However, documents marked confidential can only be accessed by the CPC.

Be heard

The parties to the concentration and any other parties to the proceedings have the right to be heard at closed hearing. The CPC can also invite experts, state authority representatives, and so on to submit information and expert reports. The CPC must hold a closed hearing at least 14 days after the deadline for the submission of written opinions has passed (see above, Representations and Question 4, Phase II in-depth investigation).

Substantive test

7. What is the substantive test?

The substantive test is whether the concentration would establish or strengthen a market dominant position that would significantly impair effective competition in the relevant market(s) (Article 26(1), APC).

According to the CPC's internal regulations and its previous decisions, there is a rebuttable assumption that competition in the relevant market is unlikely to be significantly impaired or restricted if the concentration would have a market share of less than:

  • 15%, where the undertakings party to the transaction are competitors.

  • 25%, where the undertakings party to the transaction are not competitors.

The CPC can approve a concentration that would establish or strengthen a market dominant position even if it significantly impaired competition in the relevant market if the positive effects of the concentration are expected to outweigh the negative impact on competition and the transaction aims to do all of the following:

  • Modernise the relevant economic sector.

  • Improve the structure of the relevant market.

  • Promote consumers' interests.

Remedies, penalties and appeal

8. What remedies can be imposed as conditions of clearance to address competition concerns? At what stage of the procedure can they be offered and accepted?

The CPC can impose any conditions of clearance that it finds necessary to preserve effective competition including structural and behavioural remedies. The CPC may impose, for example, remedies consisting of removal of connections between competitors, such as:

  • Termination of distribution agreements between competitors.

  • Sales of minority shareholdings in a joint venture.

The parties can also propose such remedies, which are subject to the CPC's approval, in order to be implemented. Such remedies may be proposed either during the initial investigation or during an in-depth investigation (see Question 4).

 
9. What are the penalties for failing to comply with the merger control rules?

Failure to notify correctly

If a concentration is wilfully notified incorrectly, the following penalties apply:

  • Undertakings: a fine of up to 1% of the total turnover of the participating undertakings for the preceding financial year (Article 100(2), item 3, APC).

  • Individuals: a fine of between BGN500 to BGN25,000 (Article 102(2), APC).

Failure to notify

If a concentration is not notified, the following penalties apply:

  • Undertakings: a fine of up to 10% of the total turnover of the participating undertakings for the preceding financial year (Article 100(1), APC).

  • Individuals: a fine of between BGN500 to BGN50,000 (Article 102(1), APC).

Implementation before approval or after prohibition

The same penalties apply as for failure to notify.

Failure to observe

The same penalties apply as for failure to notify.

 
10. Is there a right of appeal against any decision? If so, which decisions, to which body and within which time limits? Are rights of appeal available to third parties or only the parties to the decision?

Rights of appeal and procedure

A decision or ruling made by the CPC can be appealed to the SAC, the only statutory exception being the CPC decision to begin an in-depth investigation, which cannot be appealed. In practice, no party would have a legal interest to appeal a decision that a planned transaction does not fall within the definition of a concentration, or a decision granting clearance of a concentration where no interested parties have been adjoined to the proceedings.

Any appeal to the SAC by the parties to the proceedings should be filed within 14 days of notification (announcement) of the CPC's decision.

Appeals are heard by three judges. A decision made by the SAC at first instance can in turn be appealed to a five-member chamber of the SAC, whose decisions are final.

Third party rights of appeal

Any interested third party can appeal a decision made by the CPC to the SAC within 14 days of the decision's publication in the CPC's electronic register. When filing its appeal, the third party should specify whether and to what extent the relevant decision affects its rights.

Automatic clearance of restrictive provisions

11. If a merger is cleared, are any restrictive provisions in the agreements automatically cleared? If they are not automatically cleared, how are they regulated?

The law does not provide for the automatic clearance of restrictive provisions on clearance of a concentration.

The CPC can impose specific remedies in relation to any restrictive provisions contained in merger agreements. If it does not do so, then the law governing restrictive agreements and practices applies to the provision (see Questions 13 to 25).

Regulation of specific industries

12. What industries (if any) are specifically regulated?

Concentrations in the banking and insurance sectors are specifically regulated. If a transaction in the banking or insurance sector would lead to an increased shareholding above certain thresholds, the acquirer of the shareholding must obtain the prior approval of the Bulgarian National Bank or the Financial Supervision Commission, respectively. If the acquirer does not obtain such approval, it cannot exercise the rights attached to the acquired shares.

 

Restrictive agreements and practices

Scope of rules

13. Are restrictive agreements and practices regulated? If so, what are the substantive provisions and regulatory authority?

Restrictive agreements and practices in Bulgaria are regulated by the APC and the Code of Administrative Procedure. The APC prohibits agreements, decisions and concerted practices that have the object or effect of preventing, restricting or distorting competition in a market in Bulgaria. The Code of Administrative Procedure contains general principles concerning investigations into restrictive agreements and practices and the imposition of penalties.

The relevant regulatory authority is the CPC. Decisions of the CPC can be appealed to the SAC. The CPC's interpretation of the legislation is generally consistent with the body of EU law (acquis communautaire) in the area of competition.

 
14. Do the regulations only apply to formal agreements or can they apply to informal practices?

The APC prohibits any of the following where they are aimed at, or result in, the prevention, restriction or distortion of competition on the relevant market (Article 15, APC):

  • Formal and informal agreements between undertakings.

  • Decisions of associations of undertakings, that is, an association in a professional field that does not:

    • perform its own activity separately from the activity of the participating undertakings;

    • allocate profit.

  • Concerted practices of two or more undertakings.

The CPC has found that even preliminary and framework agreements can breach the prohibition.

Exemptions

15. Are there any exemptions? If so, what are the criteria for individual exemption and any applicable block exemptions?

The following exemptions may apply:

  • Individual exemptions. Restricted agreements, decisions and concerted practices are exempt from the general prohibition if they do all of the following:

    • contribute to improving the production or distribution of goods or to technical or economic progress;

    • allow consumers a fair share of the resulting benefit;

    • do not impose restrictions on the parties that are unnecessary to the attainment of these objectives; and

    • do not give the parties the ability to eliminate competition in respect of a substantial part of the relevant market.

  • Block exemptions. The CPC can adopt national rules to block-exempt certain categories of restrictive agreements, decisions and concerted practices that fulfil the criteria for individual exemption. Such a decision by the CPC is not subject to appeal. The block exemption rules contain:

    • a list of restraints that are exempt under certain conditions (grey list);

    • a "black list" of hard-core restrictions that cannot receive the benefit of the block exemption.

    Currently, block exemptions in Bulgaria concern:

    • vertical agreements;

    • agreements in the motor vehicle sector;

    • specialisation agreements;

    • agreements for research and development;

    • agreements in the insurance sector;

    • agreements for transfer of technology.

    The CPC can withdraw the benefits of a block exemption for a particular agreement which, while technically falling within the category of a block exemption, is not complying with the conditions for individual exemption. In this case, the CPC does not impose a penalty but instead sets a deadline by which the participating undertakings must either make their arrangement compliant with the law or terminate it.

    Exclusions and statutes of limitation

    16. Are there any exclusions? Are there statutes of limitation associated with restrictive agreements and practices?

    Exclusions

    The APC is excluded from applying to a restrictive agreement, decision or practice if the infringement has been committed by undertakings that provide public services on behalf of the state or a municipality, to the extent that competition in the country is not affected to an appreciable extent. However, the APC will still apply if that application does not in fact or in law hinder the ability of the undertakings to complete the tasks assigned to them (Article 2(1), APC).

    For this "public services" exclusion to apply, the CPC must establish that:

    • There has been an assignment of public services to the undertakings concerned.

    • Provision of those services necessarily results in some damage to competition.

    • The infringement is not significant (that is, there is no significant impact on the relevant market).

    The APC is also excluded from applying to restrictive agreements, decisions and concerted practices that have no material effect on competition.

    The effect on competition is not material if the aggregate market share of the parties concerned does not exceed (Article 16(2), APC):

    • 10% of the relevant market if the participating undertakings are competitors.

    • 15% of each of the relevant markets if the participating undertakings are not competitors.

    However, this de minimis exclusion does not apply if the relevant agreement, decision or practice has, as its object or effect:

    • The direct or indirect fixing of prices.

    • The allocation of markets and/or clients.

    • The limitation of production and sales.

    Statutes of limitation

    The statute of limitation for the prosecution of breaches of the law is five years from the day that the breach was committed or repeated violation has been discontinued (Article 42(1), APC). For continuing breaches the statute of limitation starts from the date of their discontinuance.

    The commencement of prosecution proceedings (including by the European Commission) suspends the running of the statute of limitation period.

    Notification

    17. What are the notification requirements for restrictive agreements and practices?

    Notification

    There is no formal notification procedure. Parties must themselves determine whether their agreements fall within the prohibition and, if so, whether it satisfies the conditions for individual exemption or any relevant exclusion.

    Informal guidance/opinion

    There is no procedure for obtaining comfort letters from the CPC.

    Responsibility for notification

    Not applicable.

    Relevant authority

    Not applicable.

    Form of notification

    Not applicable.

    Filing fee

    Not applicable.

    Investigations

    18. Who can start an investigation into a restrictive agreement or practice?

    Regulators

    The CPC can launch an investigation on its own initiative.

    Third parties

    An investigation can be started following a complaint by an affected third party. A third party is any individual or legal entity whose interests are affected or might be affected by the relevant agreement, decision or practice. This third party then becomes a party to the proceedings.

    Any complaint must be submitted in Bulgarian, generally in a form approved by the CPC. A filing fee of BGN500 applies.

    An investigation can also be started at the request of a public prosecutor.

     
    19. What rights (if any) does a complainant or other third party have to make representations, access documents or be heard during the course of an investigation?

    Representations

    If, as a result of an investigation, the CPC makes a preliminary ruling that an infringement has occurred, the CPC generally allows at least 30 days for:

    • The parties involved in the agreement or practice to file their written objections to the decision.

    • Affected third parties who are parties to the proceedings to provide statements on the decision.

    Document access

    The CPC must provide the parties to the proceedings with access to all documents, evidence and information collected during the investigation with the exception of those documents that are confidential (the same rules on confidentiality apply as for merger investigations (see Question 5)).

    Be heard

    The parties participating in the proceedings have the right to participate in an open hearing held by the CPC. Such a hearing should be held before the CPC issues its final decision.

     
    20. What are the stages of the investigation and timetable?

    The stages of the investigation are:

    • Commencement of the investigation: within seven days of the receipt of a complaint or from the date that the CPC decides to begin an investigation on its own initiative.

    • Closed session of the CPC: this should be held within 14 days following the preparation of an investigation report. At this stage the CPC issues a preliminary ruling, which may be:

      • that there has been no infringement;

      • that further investigation is required;

      • that there has been an infringement.

    • 30-day period for the provision of statements and additional evidence by the parties.

    • Closed hearing at which the parties can be heard: within 14 days of the expiry of the above 30-day period.

    • Final closed session of the CPC, after which the CPC issues a reasoned decision: within 14 days following the closed session (Article 60(2), APC).

    The above timeline is not binding on the CPC, although the CPC usually complies with procedural time frames.

    Publicity and confidentiality

    21. How much information is made publicly available concerning investigations into potentially restrictive agreements or practices? Is any information made automatically confidential and is confidentiality available on request?

    Publicity

    The following documents and information must be published in the CPC's electronic register:

    • Notification of the commencement of an investigation: within seven days of commencement of the investigation.

    • The CPC's final decision concerning the agreement or practice: within 14 days of the ruling.

    • Decision by the CPC to grant an individual or block exemption: within 14 days of the ruling.

    Automatic confidentiality

    The same rules apply as for merger investigations (see Question 5).

    Confidentiality on request

    The same rules apply as for merger investigations (see Question 5).

     
    22. What are the powers (if any) that the relevant regulator has to investigate potentially restrictive agreements or practices?

    CPC officials performing an investigation can:

    • Request information and material (including oral and written explanations), and written, digital and electronic evidence.

    • Carry out dawn raids (subject to obtaining a court order from the Administrative Court of Sofia).

    • Appoint external experts.

    • Request information or assistance from other national competition regulatory authorities of EU member states as well as from the European Commission.

    All individuals and legal entities, including undertakings, associations of undertakings, state and municipal authorities and non-governmental organisations, must assist the CPC in its investigations if required. Any request from the CPC to provide information cannot be refused on the basis that the information is secret.

    Settlements

    23. Can the regulator reach settlements with the parties without reaching an infringement decision? If so, what are the circumstances in which settlements can be reached and the applicable procedure?

    The parties can propose measures to settle the proceedings at any stage of the investigation. If the CPC approves the proposed measures, it terminates the investigation without issuing a ruling on the agreement or practice. However, the CPC cannot approve such measures if there has been a serious infringement of the law. There are no guidelines concerning what serious means in this context, however, it is likely that the CPC will not approve any arrangement which involves:

    • Hard-core restrictions (that is, price-fixing, limitation of production, and so on).

    • Material impact on the relevant market (that is, the existence of parallel distribution networks of significant size).

    The CPC can re-open an investigation where:

    • New circumstances arise.

    • The parties do not meet their settlement commitments.

    • The settlement is based on incomplete, inaccurate, dubious or misleading information.

    Penalties and enforcement

    24. What are the regulator's enforcement powers in relation to a prohibited restrictive agreement or practice?

    Orders

    The CPC can:

    • Order that the infringing behaviour cease.

    • Impose appropriate behavioural and structural measures on the parties. Structural measures should only be imposed if behavioural measures are not appropriate.

    Fines

    The CPC can impose fines of up to 10% of the total turnover of the participating undertakings for the preceding financial year. CPC decisions on fines can be appealed to the SAC.

    If the parties do not pay the fine on time, the CPC can obtain a writ of execution and begin enforcement proceedings before a bailiff.

    Personal liability

    The CPC can impose administrative fines of between BGN500 to BGN50,000 on any individual who has caused or facilitated the infringement.

    Immunity/leniency

    A participant in a prohibited agreement or practice may be fully or partially exempted from paying a fine if, before the other participants, it provides the CPC with sufficient evidence for the latter to:

    • Carry out a dawn raid (subject to receiving the relevant court order).

    • Prove that the infringement occurred.

    In addition, to be eligible for leniency, the party requesting it should:

    • Not have forced the other undertakings involved to participate in the prohibited agreement or practice.

    • Have suspended its participation in the agreement or practice unless the CPC decides that such participation is necessary for the investigation.

    • Comply with all other requirements set by the CPC's leniency programme (the programme is available on the CPC's website (see box, The regulatory authority)).

    Impact on agreements

    Restrictive agreements and practices are null and void in their entirety, unless there are provisions that are not related to the restrictive provisions that can be enforced independently of the restrictive ones.

    Third party damages claims and appeals

    25. Can third parties claim damages for losses suffered as a result of a prohibited restrictive agreement or practice? If so, what special procedures or rules (if any) apply? Are class actions possible?

    Third party damages

    Third parties can claim damages for losses suffered as a result of a restrictive agreement or practice. Such actions can be grounded on the normal civil law provisions of the Obligations and Contracts Act and brought in accordance with the procedures set by the Civil Procedure Code.

    Special procedures/rules

    There are no special rules or procedures.

    Class actions

    Class actions are allowed. There is a special procedure in place for the filing and hearing of such actions. The district civil court hears class actions at first instance. Once the proceedings commence, the court makes an order for publication of the action and sets a deadline within which affected individuals or entities can join.

     
    26. Is there a right of appeal against any decision of the regulator? If so, which decisions, to which body and within which time limits? Are rights of appeal available to third parties, or only to the parties to the agreement or practice?

    Rights of appeal and procedure

    The same rights of appeal apply as for merger investigations (see Question 10).

    Third party rights of appeal

    The same rights of appeal apply as for merger investigations (see Question 10).

     

    Monopolies and abuses of market power

    Scope of rules

    27. Are monopolies and abuses of market power regulated under administrative and/or criminal law? If so, what are the substantive provisions and regulatory authority?

    Abuse of market power is regulated by the APC. The abuse of market power by a legal monopoly (see Question 28) or a dominant undertaking or undertakings is prohibited (Article 21, APC). Abuse is defined as "market behaviour… that may prevent, restrict or distort competition and impair customers' interests" (Article 21, APC).

    The CPC is the relevant regulatory authority. Its interpretation of the legislation is generally consistent with the body of EU law (acquis communautaire) in the area of competition.

     
    28. How is dominance/market power determined?

    A monopoly occurs when the law grants an undertaking an exclusive right to carry out a certain type of economic activity (Article 19, APC).

    Dominance occurs when an undertaking can harm competition in the market as a result of its independence from competitors, suppliers or buyers (Article 20, APC). This can occur as a result of:

    • The undertaking's market share.

    • Financial resources.

    • Access to the market.

    • Technological capacity.

    • Economic ties with other undertakings, and so on.

    Collective dominance occurs where two or more undertakings enjoy a collective dominant position without being individually dominant.

    There is a rebuttable assumption that dominance exists where the market share of the undertaking(s) under investigation is 40% or more (this is established by section 3.2 of the CPC's methodology on determining market position, which has been adopted by CPC Decision no 393/21.04.2009).

     
    29. Are there any broad categories of behaviour that may constitute abusive conduct?

    Any of the following behaviour constitutes abusive conduct (Article 21, APC):

    • Directly or indirectly imposing purchase or sale prices or other unfair trading conditions.

    • Limiting production, trade and technical development to the detriment of customers.

    • Applying dissimilar conditions for equivalent transactions to certain contractual parties, thereby placing them at a competitive disadvantage.

    • Making the conclusion of contracts subject to acceptance by the other party of additional obligations or to the conclusion of additional contracts which, by their nature or in accordance with common commercial usage, have no connection with the object of the main contract or with its performance.

    • Unjustifiably refusing to supply goods or to provide services to actual or potential customers with the aim of impairing their economic activity.

    The above list is not exhaustive.

    Exemptions and exclusions

    30. Are there any exemptions or exclusions?

    The prohibition does not apply where the undertaking has been prevented from adhering to its contractual obligations and has been caused to abuse its dominant position as a result of objective external circumstances. In this case, the undertaking concerned must be able to prove the existence of an external circumstance that has had the same impact on all participants in the market. It must also be able to prove that the abusive conduct has had a less negative effect on customers than the impact that would have been experienced if the abusive conduct had not taken place. The CPC has stated that it will apply these exemptions in compliance with the relevant EU rules and guidelines (see Communication on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings (OJ 2009 C45/02)).

    The public service exclusion applicable to restrictive agreements and practices also applies in the context of abusive conduct (see Question 16, Exclusions).

    Notification

    31. Is it necessary (or, if not necessary, possible/advisable) to notify the conduct to obtain clearance or (formal or informal) guidance from the regulator? If so, what is the applicable procedure?

    Abusive practices cannot be notified for clearance in Bulgaria. Parties must themselves determine whether the conduct is prohibited and, if so, whether it satisfies the conditions for an individual exemption or a relevant exclusion.

    Investigations

    32. What (if any) procedural differences are there between investigations into monopolies and abuses of market power and investigations into restrictive agreements and practices?

    The rules of procedure for investigations into monopolies and abuses of market power are substantially the same as those applicable to investigations into restrictive agreements and practices (see Question 16, Statute of limitation, and Questions 18 to 21 and 23).

     
    33. What are the regulator's powers of investigation?

    Penalties and enforcement

    34. What are the penalties for abuse of market power and what orders can the regulator make?

    The rules on penalties and enforcement as set out in Question 24, excluding leniency which cannot be obtained by undertakings found to have abused their market power.

    Third party damages claims

    35. Can third parties claim damages for losses suffered as a result of abuse of market power? If so, what special procedures or rules (if any) apply? Are class actions possible?
     

    EU law

    36. Are there any differences between the powers of the national regulatory authority(ies) and courts in relation to cases dealt with under Article 101 and/or Article 102 of the TFEU, and those dealt with only under national law?

    There are no differences between the powers of the CPC and the Bulgarian courts in relation to cases dealt with under national law and those dealt with under Article 101 and/or 102 of the TFEU. Third parties can also seek damages under civil law where anti-competitive behaviour has been established under EU law (see Question 25).

     

    Joint ventures

    37. How are joint ventures analysed under competition law?

    There is no legal definition of joint venture. However, a joint venture is a concentration and is subject to merger control (provided the relevant thresholds are met) where it (Article 22(2), APC):

    • Is jointly controlled.

    • Carries out all the functions of an independent economic entity on a lasting basis.

    Any anti-competitive conduct by a co-operative joint venture is examined under the rules on restrictive agreements and practices or abusive power.

     

    Inter-agency co-operation

    38. Does the regulatory authority in your jurisdiction co-operate with regulatory authorities in other jurisdictions in relation to infringements of competition law? If so, what is the legal basis for and extent of co-operation (in particular, in relation to the exchange of information)?

    Acting in its capacity as a national competition authority (NCA) under EU law (Article 22, Regulation (EC) 1/2003 on the implementation of the rules on competition laid down in Articles 101 and 102 of the TFEU), the CPC may send another NCA a request to carry out inspections or other investigations in its jurisdiction. Such a request is limited to enforcing EU competition law only. The CPC also has obligations concerning the exchange of information with other NCAs and the Commission in relation to investigations.

    Referrals concerning national competition rules are governed by the general rules on administrative and judicial co-operation between authorities of the relevant countries.

     

    Proposals for reform

    39. Are there any proposals for reform of competition law?

    At present, the authors are not aware of any proposals for reform of competition law in Bulgaria.

    However, reform should occur in the future to bring the substantive test for merger clearance (Article 26(1), APC) into line with EU law.

     

    The regulatory authority

    Commission for Protection of Competition (CPC)

    Head. Petko Nikolov, Chairman

    Contact details. 18, Vitosha Blvd
    1000 Sofia, Bulgaria
    T +359 2 935 6113
    F +359 2 980 7315
    E cpcadmin@cpc.bg
    W www.cpc.bg/

    Outline structure. The CPC is an administrative body consisting of seven members (including a chairman and a vice-chairman), who are elected by the Bulgarian National Assembly for a five-year term (Article 4(1), APC).

    The CPC has five directorates and two analytical units attached to the Antitrust and Concentrations Directorate.

    Responsibilities. The CPC enforces the APC, that is, it regulates mergers, restrictive agreements and practices, monopolies and abusive conduct. It is also the administrative appeal body for unfair competition cases.

    The CPC is also a national competition authority (NCA) within the EU and applies EU competition law and co-operates with other NCAs.

    In addition, the CPC hears appeals of decisions concerning public procurement and concessions' grants under the Public Procurement Act and the Concessions Act, respectively.

    The Commission can impose interim measures when undertaking its activities.

    Procedure for obtaining documents. Legislation and CPC documents (decisions, internal rules, announcements, press releases and so on) can be accessed from the CPC's website (most of the information is also available in English). Parties to proceedings have access to their case files (legal representatives or expressly authorised proxies can also review files and obtain documents).



    Contributor details

    Milen Rusev

    Dinova Rusev and Partners Law Office

    T +359 943 4350
    +359 879 009 521
    F +359 2 946 3418
    E milen.rusev@drp-legal.com
    W www.drp-legal.com

    Qualified. Member of the Bar of Stara Zagora, Bulgaria, 2000

    Areas of practice. Competition law; IP; company and commercial law.

    Recent transactions

    • Acting for Reckitt Benckieser in a dispute concerning the illegal imitation of branded consumer goods.
    • Advising a large hotel operator on the restructuring of its activities in the Balkans' area.
    • Representing a client before the CPC in merger clearance proceedings in respect of a debt restructuring deal.

    Vesela Angelova Kabatliyska

    Dinova Rusev and Partners Law Office

    T +359 943 4350
    +359 879 609 566
    F +359 2 946 3418
    E vesela.kabatliyska@drp-legal.com
    W www.drp-legal.com

    Qualified. Sofia University St Kliment Ohridski, Bulgaria, 2009

    Areas of practice. Competition law; employment law; company and commercial law; dispute resolution.

    Recent transactions

    • Appeared in proceedings before the competition authorities related to misleading advertisements.
    • Protection of a client's interests in product imitation and trade mark violation proceedings before the competition authorities.
    • Advising a company with a dominant position in the Bulgarian market regarding distribution agreement issues arising at a regional level.
    • Advising on merger clearance relating to an acquisition of companies.

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