When it comes to attracting customers and increasing profits, businesses in Bulgaria never hesitate to use all permitted and non-allowed tricks. Lately we have seen all sorts of arrangements between producers, distributors and retailers whose sole purpose is to line their pockets at the expense of consumers. Telecoms, district heating companies, electricity distributors and many others twist the hands of clients with all kinds of fees, as they have no real competition in their sectors. All this leads to the absurd situation where Bulgarians, whose income levels are the lowest in the European Union, actually pay for most goods and services equal and even higher prices than peoples of Western Europe. This becomes possible due to weak control mechanisms and violations left unpunished.
Throughout 2013 the Commission for Protection of Competition (CPC ) initiated only nine proceedings against
prohibited agreements
cartel decisions and concerted practices. It imposed only four fines for such offenses whose total volume is 2,322,122 levs. Fined are the manufacturers of bottled refined sunflower oil Zvezda, Kaliakra, Bunge, Bunge Romania, Biser Oliva and their main distributors. Proceedings were initiated following a sector market analysis of the production and marketing of sunflower oil. The Commission has established the existence of clauses in contracts between manufacturers and distributors that provide mechanisms for identifying specific sale prices. According to the anti-monopoly body, the effect of this move is an elimination of price competition between distributors and an increase the final price. All of the decisions of the Commission, however, are now to be appealed before the Supreme Administrative Court, so that virtually there have been no sanctions so far.
Nothing came out of the much-talked-about public checks when inspectors went on the spot in various companies. A year ago, the offices of Autotechnica were searched through in connection with proceedings for breaches, namely the application of restrictions in agreements concluded by the Company with dealers for the distribution and servicing of the Seat brand automobiles. However, on 12 February 2014 the control body stopped the proceedings since it had found no violations.
Spectacular checks were carried out in CEZ Bulgaria, CEZ Electro Bulgaria, CEZ Distribution Bulgaria, CEZ Trade Bulgaria, EVN Bulgaria, EVN Bulgaria Electricity Supply, EVN Bulgaria Electricity Distribution, EVN South Eastern Europe, Energo-Pro Sales, Energo-Pro Networks, Energo-Pro Bulgaria Trading, Energo-Pro energy Services and the Association of Electricity Traders in Bulgaria and the energy Management Institute. The fact is that no specific illegal agreements between these entities have yet been disclosed.
On suspicions of abuse of monopoly or dominant position experts of the competition watchdog visited in September 2013 the offices of Sofia Heating Company and also the heat accountants Ista Bulgaria and Techem Services. In these cases, a month ago, the CPC said there were alleged violations, but it has not yet demonstrated any breaches of the country’s legislation.
As a matter of fact on abuses of
monopoly or dominant position,
which is the second most significant offense of companies last year, only seven were imposed fines for 3,299,380 levs. Because of an unjustified refusal to maintain a contractual relationship with Holiday and Reisen, Dalkia Varna was fined by a symbolic 920 levs, while this is not the first such penalty for the Varna heating company. In 2011 it was already ruled to pay 232,242 levs over abuse of a dominant position following a signal by the same heat accountancy company.
Unlike the district heating in Varna, Pleven Municipality will have to pay 23,700 levs for the violations of their companies Zhilfond and Centre for Urban Mobility. Other 211,715 levs in fines were imposed to the Water Supply and Sanitation Company of Vidin that unduly refused to provide services to a client to hinder his business. Furthermore, the Commission for Protection of Competition imposed a financial penalty of 338,094 levs to the Heating Company of Sofia as it found that the latter impeded the entry into market of a new player in the segment of heat distribution.
The largest, however, is the fine for abuse of dominant position imposed on the electricity company Energo Pro: it is over 2.73 million levs. Of the total amount, a sum of 1,687,484 levs is the fine to Energo – Pro Sales, which because of late payment stopped the electricity supply to the pumping stations of the Water and Sanitation Company in the region of Dobrich. The watchdog experts found that the energy company had to find another way to collect its money because ultimately it seriously violated consumer rights of people in the region.
The remaining 1 million levs in fines were imposed on Energo-Pro Networks. The reason is that it is imposed disproportionate restrictions on production capacities from renewable energy sources – it stopped some of them at the expense of the others. Both sanctions against Energo Pro have been appealed to the Supreme Administrative Court.
MobilTel (Mtel) mobile phone operator on its turn was fined by 440,049 levs over an advertising campaign.
The BANKER
