Anticompetitive unilateral conduct

Abuse of dominance

In what circumstances is conduct considered to be anticompetitive if carried out by a firm with monopoly or market power?

Unlawful anticompetitive conduct by firms with monopoly or market power is present when they:

  • directly or indirectly impose purchase or selling prices or other unfair trading conditions;
  • limit production, trade and technical development to the prejudice of consumers;
  • apply dissimilar conditions to equivalent transactions with certain partners, thereby placing them in a disadvantaged position;
  • make the conclusion of contracts subject to the assumption of additional obligations or the conclusion of additional contracts that, by their nature or according to customary commercial practice, are not related to the subject matter of the main contract or to its implementation;
  • unjustifiably refuse to deliver a good or to provide a service to a real or potential client to prevent their business from being carried on; or
  • any other form of the firm’s conduct that is likely to prevent, restrict or distort competition and affect the interests of consumers. Monopoly market position can be established only by law, otherwise it is illegal.
De minimis thresholds

Is there any de minimis threshold for a conduct to be found abusive?

There is no applicable (de minimis) threshold for a conduct to be found abusive under Bulgarian law or court practice. In general, the CPC usually desists from enforcement action if there are no significant anticompetitive effects.

Market definition

Do antitrust authorities approach market definition in the context of unilateral conduct in the same way as in mergers? If not, what are the main differences and what justifies them?

The CPC applies the same approach as in mergers and defines the market as national.

Establishing dominance

When is a party likely to be considered dominant or jointly dominant? Can a patent owner be dominant simply on account of the patent that it owns?

In determining the notion of ‘dominant position’, Bulgarian authorities and courts apply and refer directly to the definition provided for in the F Hoffmann-La Roche and Others case (C-179/16). Relevant in this regard is the market share of the undertaking (especially if over 40 per cent in the relevant market), substantial financial resources (assets or operating profit of tens of millions of euros), and barriers to entry on the relevant market by other undertakings (legal, structural and others), if they allow the undertaking to behave to an appreciable extent independently of its competitors and customers.

Two or more undertakings may have a joint dominant position without the need for each of them to be individually dominant, if in the light of the characteristics of the relevant market, it can be established that each of the undertakings considers it possible and economically rational to adopt common market behaviour.

Holding a patent does not automatically confer dominance. Only if the patent is enforced to the detriment of competitors and grants the undertaking an appreciable extent of independence to competitors and customers, will dominant position be present.

IP rights

To what extent can an application for the grant or enforcement of a patent or any other IP right (SPC, etc) expose the patent owner to liability for an antitrust violation?

Patent enforcement may engage the liability of the undertaking for anticompetitive behaviour where it is used, or is likely, to infringe competition (see question 27). The Bulgarian competition authorities have not had the occasion to review patent-related complaints.

When would life-cycle management strategies expose a patent owner to antitrust liability?

Life-cycle management (LCM) in the pharmaceutical sector is common, but on a stand-alone basis unlikely to engage the antitrust liability of the patent holder. Under Bulgarian law, patent protection for medicines is limited to a period of 20 years. LCM strategies will be viewed as particularly problematic if they impede or prevent the entry of generic medicines to the market. The Bulgarian authorities, for the time being, have not ruled on the lawfulness of LCM strategies, but will likely follow the AstraZeneca judgment (C-457/10) of 2012.

Communications

Can communications or recommendations aimed at the public, HCPs or health authorities trigger antitrust liability?

If communications or recommendations aimed at the public or HCPs contain misleading statements about the characteristics of the medicinal products or misleading and comparative advertising, these will constitute violations of the Bulgarian competition law. For example, in the 2016 case against Walmark Bulgaria, the CPC found that the advertisement of its product was misleading and caused damage to the reputation of its competitors by suggesting that the other products would have lower positive effects on patients. However, in 2017, the Supreme Administrative Court annulled the CPC’s decision.

Authorised generics

Can a patent owner market or license its drug as an authorised generic, or allow a third party to do so, before the expiry of the patent protection on the drug concerned, to gain a head start on the competition?

The holder of the authorisation for use of the generic product may not place it on the market until 10 years have elapsed since the date of the first authorisation of the reference medicinal product. The consent of the patent holder is irrelevant. Before the expiry of the 10-year period, the generic drug may be marketed only for purposes and uses unrelated to the scope of the patent protection.

Restrictions on off-label use

Can actions taken by a patent owner to limit off-label use trigger antitrust liability?

If such actions fall under the general scope of application of the prohibited anticompetitive practices and arrangements, there might be instances in which these will trigger antitrust liability. However, to date, the CPC has not ruled on such case.

Pricing

When does pricing conduct raise antitrust risks? Can high prices be abusive?

Predatory pricing is considered by the CPC as one of the gravest forms of prohibited anticompetitive behaviour. Selling at unreasonably high prices when in a dominant position on the market may also trigger the antitrust liability of the undertaking (eg, when the dominant undertaking tries to justify the high price with the related costs for production, which are already covered and included in the price of a similar product or related service). However, owing to specifics of the Bulgarian market and the heavy regulation of prescribed medicines and those included in the positive drug list, it is unlikely that the CPC will have to deal with abusive pricing of medicines by single undertakings.

Sector-specific issues

To what extent can the specific features of the pharmaceutical sector provide an objective justification for conduct that would otherwise infringe antitrust rules?

In its practice, the CPC takes into account the specific features of the pharmaceutical sector. In the 2016 sector-wide inquiry, the CPC identified ensuring adequacy of supply of medicines as an area of concern, especially given the increased volumes of parallel export since 2012, and urged the government to take appropriate steps to address the issue. Thus, for example, ensuring adequate market supply could be used as an objective justification, alongside other well-grounded examples.