Unilateral conductUnilateral conduct by non-dominant firms
Are there any rules applying to the unilateral conduct of non-dominant firms?
As mentioned in question 21, from 2015, abuse of an SBP has been considered an infringement under the LPC and applies to a unilateral behaviour of non-dominant undertakings. The law prohibits any action or omission of an undertaking with an SBP as regards the contractor in the course of negotiations, such as imposing unfairly harsh or discriminatory conditions, unjustifiable termination of trading relationships, and which action or omission damages or could damage the interests of the weaker bargaining party and consumers. Unlike a dominant position, the SBP is determined not as a position of the undertaking on the market, but in the context of a particular legal relationship and with a view of the level of dependency between the undertakings concerned in the market structure, the character of their business activity, and the existence of alternative channels of supply.
For abuse of an SBP the CPC may impose a pecuniary sanction at an amount of up to 10 per cent of the undertaking’s turnover generated during the last financial year from the sale of the goods or services concerned. The amount of such pecuniary sanction cannot be less than 10,000 leva and a cap of 50,000 leva is established if the infringer did not generate any turnover in the preceding financial year.
Unlike in the antitrust investigations, under SBP investigations undertakings are not provided with a statement of objections and have no options to remedy their behaviour.
Following the CPC’s first decision for abuse of SBP prohibition in 2016, where Siemens Bulgaria was found to be in SBP as regards another undertaking requesting supply of Siemens-branded spare parts required under a public procurement tender awarded to the claimant, in 2017 CPC investigated nine SBP cases and imposed a pecuniary sanction in one case. The CPC found that BTV Media Group (a Bulgarian television channel) has abused its SBP by imposing unjustifiably burdensome conditions in the contracts using its SBP in the course of the negotiations with three cable operators. As mentioned above, in 2018 the biggest SBP case was against A1 for termination of a long-term contract with a local retailer (Handy) for exclusively servicing the network of A1, which resulted in a pecuniary sanction for A1 of approximately €400,000.
Outside of dominance and abuse of SBP, the CPC is entitled to impose a pecuniary sanction of up to 10 per cent of annual turnover on a non-dominant undertaking that sells significant quantities of goods or services over an extended period of time at prices below their production and marketing cost with the intention of unfairly soliciting clients (unfair solicitation of clients is a form of unfair competition).