In 2010 the activity of the Bulgarian Commission for Protection of Competition (the Commission) showed a trend of increasing focus on compliance shifting slightly from the antitrust area. Proceedings that have started and the most recent decisions show that this trend is likely to continue in 2011.

Compliance and advocacy
In 2010 the Commission continued with its compliance activity and intensified its advocacy activity by issuing opinions on the draft legislative and regulatory acts in a number of economic sectors. The Commission launched six new sector inquiries, including one in the motor vehicle sector, which is being investigated by the European Commission throughout the European Union following the adoption of the new block exemption rules (Regulation No. 461/2010 EC). In the same way as the European Commission and various national competition authorities have devoted unprecedented attention to the food retail sector in the past few years, in 2009 the Commission initiated an investigation in this sector (including food producers and retailers) as well, which continued during 2010. We would expect an outcome in the coming year which might have an impact on future dynamics in the sector.

With regard to its powers in compliance with unfair trade rules and its authority as an appeal body with respect to public procurement procedures, in light of the number of decisions issued in 2010 the Commission was more active in these two areas rather than in antitrust.

The Commission
In 2010 the Competition Protection Act (CPA) was amended, whereby the total number of members of the Commission was reduced from seven to five with five-year term of office. The new members of the Commission, all of them having significant experience in the area, were appointed by the National Assembly on 23 September 2010.

Cartels
In the field of antitrust, although several cartel cases were opened, there was only one decision where the Commission was able to prove an infringement and imposed a fine on an association of undertakings in the construction sector for price-fixing. As a continuing trend, compliance with competition law in relation to the activity of associations in various sectors has been a particular focus of the Commission’s supervision activity since 2008.

Given the Commission’s authority in relation to both antitrust and public procurement, on 20 May 2010 it adopted the Guidelines for Fighting Bid-Rigging in Public Procurement. The aim of the guidelines is to address the main competition concerns in public procurement procedures, both the facilitating factors and the evidence for the existence of bid-rigging.

Commitments in antitrust cases and abuse of dominant position
On 9 February 2010 the Commission adopted for the first time the Rules on Commitments (the Rules) based on the best practice of the European Commission. The Rules outline the criteria and procedures for the assessment of commitments proposed by undertakings and associations of undertakings subject to investigation by the Commission under articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) and articles 15 and 21 respectively of the CPA. Following the receipt of the Commission’s statement of objections, the investigated undertakings and associations can propose appropriate commitments as to their future market behaviour and hence avoid sanctions, subject to approval of the commitments by the Commission. This possibility was provided for in the CPA since its adoption. However, in the absence of clear rules, its application so far has been rather modest. Following the adoption of the Rules, five investigations for abuse of dominant position ended 2010 with approval of commitments, whereas the number of cases where the authority imposed sanctions for abuse of dominance in 2010 was also five.

Merger control
Upon request of the Commission, for the first time since the country joined the European Union in 2007, a merger case (concerning the food retail market) was partially referred from the European Commission to the Commission.

In the field of merger control the Commission began to implement a ‘stop the clock’ procedure and suspended clearance proceedings where the requested additional information was not provided in a timely way. After being particularly active in investigating and fining undertakings for past violations of the suspension obligation in 2009, in 2010 the Commission continued to impose sanctions for failure to notify a merger prior to its implementation. However, in its practice so far the Commission has never ordered the divestiture of merged capital, shares or assets and termination of joint control.

Unfair competition
In November 2010 the Commission issued an interpretative decision in the area of unfair competition regarding supplements. According to this decision the Commission will regard as an allowed quantity rebate within the meaning of article 36(2) of the CPA only a supplement which is of the same kind of goods or services as the main goods or services sold.

The Commission continued to increase the value of the sanctions imposed for unfair competition practices, and in 2010 the Commission applied a new approach by fining not only the organiser of an advertising campaign but also the advertising agencies involved for misleading advertising.

Fines and private enforcement
The Supreme Administrative Court (SAC) supervises the Commission’s activity. In 2010 it upheld most of the Commission’s decisions on cartels, abuse of dominance, public procurement and unfair competition, with a tendency to reduce the amounts of the sanctions imposed by the Commission.

Wolf Theiss