Bulgarian Energy Holding, the conglomerate comprising Bulgaria’s major state-owned utilities, successfully overturned a historic €77 million ($81.6 million) fine imposed by the European Union’s antitrust authority for obstructing competitors’ access to critical infrastructure, per Bloomberg.
The EU’s General Court delivered its verdict on Wednesday, completely nullifying the European Commission’s 2018 antitrust decision that had alleged BEH’s unfair exploitation of its dominant position in the local gas supply market. Judges at the Luxembourg tribunal also found that BEH’s rights to a proper defense had been violated.
Assimakis Komninos, a lawyer at White & Case representing Bulgarian Energy Holding, remarked to Bloomberg, “It’s not every day that the court annuls the finding of abuse based on a wrong assessment of the facts. This is the first time ever that this was sufficient in and of itself to lead to a full annulment.”
The antitrust order that was quashed by the court had fined BEH, along with its gas supply unit Bulgargaz EAD and gas infrastructure unit Bulgartransgaz. The European Commission’s 2018 decision had contended that Bulgarian consumers were deprived of the option to choose their gas suppliers for years, as the BEH group allegedly refused access to its gas infrastructure for other wholesale gas suppliers. While market dominance is not illegal under EU law, abusing that dominance can result in substantial fines.
The European Commission, headquartered in Brussels, has indicated that it will carefully analyze the court’s ruling, which can be appealed at the highest EU court, and will “reflect on possible next steps.”
This decision adds to a mixed track record in court for EU Antitrust Commissioner Margrethe Vestager, who is currently on temporary leave as she pursues a bid for the European Investment Bank presidency. Last year, she faced another setback in an abuse of dominance case when the EU court annulled a €997 million-euro antitrust fine imposed on Qualcomm Inc. for alleged pressure on Apple Inc. to exclusively purchase its 4G chips, primarily due to procedural errors.
Vladimir Malinov, the Chief Executive Officer of Bulgartransgaz, expressed satisfaction with the judgment, stating, “This is yet another confirmation that Bulgartransgaz has secured all the necessary conditions for securing transparent and non-discriminative access for third parties. Bulgartransgaz is a reliable and stable partner in the development and integration of the European energy market.”
The case revolved around access to the Romanian Pipeline 1, a critical conduit for transporting Russian gas to Bulgaria, with no alternative route available. Although Bulgargaz didn’t own the pipeline, it held exclusive rights to use it, rendering it a dominant player in the market.
The court’s decision emphasized that “any irregularity that might, in theory, have been committed” concerning the gas transmission network and the Chiren storage facility “could not constitute an infringement of EU competition rules because no company could have entered the Bulgarian gas market without access to the Romanian Pipeline 1.”
Source: BNN Bloomberg