ZRP
Tuca Zbarcea & Asociatii

Schoenherr: First decisions prohibiting concentrations issued in Bulgaria

08 August 2018   |   Galina Petkova, Attorney at Law - Schoenherr

Both decisions concern politically sensitive sectors (media and energy) and are currently largely criticised for their lack of valid economic arguments.

 
 
On 19 July, 2018 the Bulgarian Commission for the Protection of Competition (the "CPC") prohibited two concentrations. The first being the sale of the second largest media conglomerate in Bulgaria, Nova Broadcasting Group AD ("Nova Broadcasting"), (owner of Nova TV), to PPF Bidco, (owned by Czech businessman Petr Kellner), and secondly the sale of CEZ's assets in Bulgaria, which include its energy distribution business, trade business and some small renewable energy parks to a Bulgarian company, Inercom, which maintains three solar power stations in the country.

Both decisions concern politically sensitive sectors (media and energy) and are currently largely criticised for their lack of valid economic arguments.

Basically, in both decisions, the commission's legal arguments are given in several paragraphs only and it remains unclear why the acquisition of companies which are not competitors (or at least not major competitors) is classified as potential strengthening of dominant positions of the united group, which may impede the competition.


In both prohibited concentrations the overlap on the horizontal and vertical market/s is none or almost non-existant. Also, both concentrations concern acquisitions of large undertakings in Bulgaria (with market share in certain relevant markets which is close to or exceed 40 %) while the market share of the acquirer is insignificant (up to 5%).

Thus, for instance, in the prohibited concentration of Nova TV, the parties activities overlap only in the market of e-commerce, where both the acquirer and the target hold a market share of up to 5 %. Indeed, the Nova Broadcasting Group holds a market share of approx. 40 % in the markets of TV distribution and TV advertising. In these two markets, however, the acquirer is not active in Bulgaria, and its market share is nil. Despite the lack of actual threatening horizontal or vertical overlapping, the CPC considers that the "significant amount of mass information means, which would be accumulated by the concentrated group, would lead to its significant advantage over the other participants in the media market. Thus, the participants in the concentration would have the incentive and actual possibility to change their trade policy (e.g. by limiting the access, price increases or changes in the terms of the concluded agreements)."

In the other decision prohibiting the sale of CEZ, the CPC found that there was a horizontal overlap between the participants' activities in the concentration on the market for the production and wholesale supply of electricity from photovoltaic power plants. CPC also states that the concentration generates vertical effects on downstream markets, namely the markets for electricity distribution, and supply and trade with electricity.

The CPC does not quote the market shares of the participants on these markets. Still, none of the parties hold significant market share in these markets. The CPC, however, explains the potential threat for the competition by analysing the legislative changes in Bulgaria, which concern the buy-out of electric energy produced by small plants with a capacity exceeding 4 megawatts (under the new regime the sale is made on the energy exchange stock, while under the former regime the energy of small plants was purchased under preferential prices). The analysis of the CPC, however, fails to explain why the concentration would be detrimental for the concentration under the new legal regime (since no substantial actual change would not occur because of the concentration).

It also remains largely unclear as to why recent concentrations with almost identical factual backgrounds concerning markets as those under the prohibited decisions were approved without conditions, while these concentrations were directly prohibited by the CPC.

The decisions of the CPC can be appealed before the Supreme Administrative Court in the second instance. It remains to be seen as to what will happen.

 
 

PNSA

 
 

ARTICOLE PE ACEEASI TEMA

ARTICOLE DE ACELASI AUTOR


     

    Ascunde Reclama
     
     

    POSTEAZA UN COMENTARIU


    Nume *
    Email (nu va fi publicat) *
    Comentariu *
    Cod de securitate*







    * campuri obligatorii


    Articol 80 / 2122
     

    Ascunde Reclama
     
     
     
    BREAKING NEWS
    ESENTIAL
    Alexandru Aparaschivei se alătură NNDKP Consultanță Fiscală în calitate de coordonator al echipei de TVA
    RTPR Allen & Overy câștigă un important litigiu de dreptul muncii pentru Societatea de Distribuție a Energiei Electrice Transilvania Nord
    LegiTeam: Bondoc & Asociații is looking for PART TIME RECEPTIONIST
    Studiu realizat de CMS - Țările din Europa Centrală și de Est sunt mai amenințate de atacurile cibernetice. Gabriel Sidere, Managing Partner: Obligația de raportare a eventualelor atacuri și evaluarea impactului necesită asistență specializată din partea unor echipe de avocați cu experiență
    Cele mai interesante dosare de insolvență în care s-au implicat avocații Dentons, în 2018, au fost din banking și retail. Tiberiu Csaki, Partner: Ne concentrăm pe insolvențele transfrontaliere, unde avem un foarte bun potențial, dată fiind expertiza noastră în multiplele jurisdictii
    Proiectele BSMP în domeniu Energiei. Ionuț Bohâlțeanu, Managing Partner: Oportunitățile off-shore și investițiile în proiecte regenerabile au constituit polii de interes anul acesta
    Practica M&A și Real Estate a Clifford Chance Badea închide 2018 cu un portofoliu diversificat de investitori și proiecte asistate | Două mandate importante de asistență buy-side au fost finalizate în luna decembrie
    Noua legislație a insolvenței, cu bune și rele | Principalele prevederi de care actorii acestei piețe ar trebui să țină seama, explicate de Mariana Popa, partener în cadrul V.F. Insolvenţă SPRL
    Noi promovări la Mușat & Asociații. Doi litigatori ai firmei devin parteneri, alți nouă fac un pas înainte în carieră
    Pe masa de lucru a litigatorilor de la Mitel & Asociații s-a aflat, în 2018, un număr însemnat de mandate. Magda Dima, Partener: Ne propunem să menținem trendul ascendent în gestionarea litigiilor complexe, care să confirme statutul nostru de jucători de primă ligă în avocatura de business
    LegiTeam: Clifford Chance Badea is looking for junior|middle level associates (Corporate M&A and Real Estate)
    Dentons, alături de un sindicat format din patru bănci, în finanțările succesive acordate grupului AmRest. Perry V. Zizzi, Romania Managing Partner a coordonat echipa din România
     
    Citeste pe SeeNews Digital Network
    • BizBanker

    • BizLeader

        in curand...
    • SeeNews

      in curand...