Competition: Commission accepts Bulgarian Energy Holding's commitments to open up Bulgarian wholesale electricity market

On 10 December 2015, the Commission announced that it has accepted commitments offered by Bulgarian Energy Holding ("BEH") to end restrictions of competition on Bulgaria's wholesale electricity market. BEH is an incumbent vertically-integrated energy company, owned by the Bulgarian state. The Commission initially opened an investigation in November 2012 into whether BEH may be abusing its dominant position in the wholesale electricity market in Bulgaria and later sent Statement of Objections ("SO") to BEH in August 2014. The Commission had concerns that the territorial restrictions on resale in BEH's electricity supply contracts with traders on the non-regulated Bulgarian wholesale electricity market may violate Article 102 of the Treaty on the Functioning of the European Union ("TFEU") because they limit traders' freedom to choose where to resell the electricity bought from BEH. Namely, a majority of electricity supply contracts entered into between BEH and traders stipulated that electricity supplied by BEH may only be resold within Bulgaria or may only be exported. The contracts also contained control and sanctioning mechanisms that allowed BEH to monitor and punish customers who failed to comply with these territorial restrictions.

To address the Commission's concerns, BEH committed to set up a new power exchange in Bulgaria. According to the Commission, power exchanges ensure anonymous trading of electricity and prevent sellers from enforcing territorial restrictions on resale because the seller cannot trace the electricity it sells. In order to ensure the independence of the new power exchange, BEH also offered to set up the new power exchange with the assistance of an independent third party with expertise in the area, and to transfer control of ownership over the power exchange to the Bulgarian Ministry of Finance. Finally, BEH committed to offer minimum stipulated volumes of electricity on the new power exchange for a period of five years. These volumes will be put up for sale in the day-ahead market, with a maximum price based on the marginal costs of BEH's production subsidiaries. The volumes will vary on an hour-by-hour basis, based on electricity consumption patterns in Bulgaria. According to the Commission, these measures will ensure the liquidity of the exchange.

The Commission found that BEH's commitments address its competition concerns. Furthermore, the commitments make it easier to trade electricity, improve price transparency on the market and promote the integration of the Bulgarian wholesale electricity market with neighboring countries' markets. The Commission therefore made the commitments legally binding on BEH and its subsidiaries. Source:Commission Press Release 10/12/2015 and Commission Press Release 12/08/2014

Competition: Commission presents first legislative proposals to improve online commerce as part of its Digital Single Market Strategy

On 9 December 2015, the Commission presented its first legislative proposals to ensure better access for consumers and businesses to online content, goods and services across Europe, as part of its Digital Single Market Strategy.

In May 2015, the Commission published a Communication on a Digital Single Market Strategy for Europe setting out various actions to be taken to achieve the vision of a Digital Single Market. The Digital Single Market Strategy is intended to tackle all major obstacles to the development of cross-border online commerce in the EU. Overall, the Commission will present 16 initiatives as part of its Digital Single Market Strategy by the end of 2016.

The Commission has now presented two draft directives to harmonize key aspects of the sale of digital content to consumers and the online sale of goods to consumers. The proposed new rules on digital contracts aim to better protect consumers who buy digital content or goods online across the EU and help businesses expand their online sales. In addition, the Commission has proposed a Regulation on ensuring the cross-border portability of online content services in the internal market. The Commission wants to ensure that Europeans who have purchased films, series, sports broadcasts, games or e-books online while at home can access them when they travel across the EU. Together with this proposal, the Commission outlines an action plan to modernize EU copyright rules.

Along with these proposals, the Commission has also published new statistics by Eurostat on the growth of online commerce by EU businesses and individuals. The statistics on online commerce by EU businesses show that enterprises located in the EU made 17 percent of their total turnover from electronic sales to other businesses or consumers, compared with 12 percent in 2008. The statistics on online commerce by individuals show that in 2015, 1 out of 2 persons in the EU made purchases online. This means that the EU has exceeded its Digital Agenda target of 50 percent by 2015.

Source: Commission Press Release 09/12/2015

Proposal for a Regulation on portability of online content services

Proposal for a Directive on certain aspects concerning contracts for the supply of digital content

Proposal for a Directive on certain aspects concerning contracts for the online and other distance sales of goods

Eurostat: Online commerce by individuals

Eurostat: Online commerce in EU enterprises

Public procurement (Sweden): Administrative Court of Stockholm fines Stockholm County Council SEK 10 million for circumventing the public procurement rules

On 10 December 2015, the Administrative Court of Stockholm ("Court") has, in accordance with the Swedish Competition Authority's ("SCA") proposal fined the Stockholm County Council ("SCC") SEK 10 million for awarding a contract by a direct award in violation of public procurement rules. The SCC claimed that the direct award was justified by extraordinary reasons, as the tendered services were of public interest and that the direct award was necessary in order to avoid a state of non-agreement. In addition, the SCC claimed that a short term procurement, instead of the direct award, could be detrimental from the perspective of the central stakeholders. 

The Court, however rejected these arguments and ruled, in accordance with relevant preparatory works, that the direct award in question was not allowed and could not be justified, mainly because the SCC had had sufficient time, approximately two years, to plan the tendering of the services. In determining the amount of the fine, the Court took into consideration that awarding a contract by a direct award in violation of procurement rules is one of the most serious procurement infringements and that the SCC had previously been found to have infringed the same rule. Consequently, taking into account the SCC's recidivism and the seriousness of the infringement, the Court imposed the maximum procurement fine of SEK 10 million on the SCC. Source: Swedish Competition Authority Press Release 10/12/2015 and Stockholm Administrative Court Judgment 13345-15, 10/12/2015

In addition, kindly note the following merger control decisions by the Commission which are published on the website of the Commission’s Directorate-General for Competition:

  • Commission approves acquisition of SolarWinds by Thoma Bravo and Silver Lake Group
  • Commission approves acquisition of Amlin by MS&AD in insurance sector
  • Commission approves Trafigura's acquisition of de facto sole control of Nyrstar
  • Commission approves acquisition of joint control of Groupe Vivalto Sante by CDC International Capital, Mubadala and Vivalto Bel
  • Commission approves acquisition of Prinovis by Bertelsmann
  • Commission approves acquisition of automotive components company Montupet by Linamar
  • Commission approves acquisition of two hotels in London by AXA, ATP and Club Quarters