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 5 / 2047
     

    Ascunde Reclama
     
     
     
    BREAKING NEWS
    ESENTIAL
    Reff & Associates - Associate | Corporate and M&A
    Reff & Associates - Senior Lawyer Banking & Finance
    NNDKP și Wolf Theiss, în finanțarea de 46 mil. E obținută de Globalworth de la BCR. Banii vor merge în dezvoltarea Renault Bucharest Connected
    Schoenherr, EY Romania și Maravela|Asociații, în tranzacția prin care belgienii de la United Petfood preiau activitățile de producție și distribuție ale liderului local în producția de hrană uscată pentru animale
    Reff & Associates - Senior Associate | Corporate and M&A
    Avocații Suciu Popa spun că un program de conformare poate fi o oportunitate de prevenție și reducere a expunerii. Ghidul de conformare elaborat de Consiliul Concurenței reprezintă un punct de start pentru firmele care doresc să devină responsabile în acest domeniu
    LegiTeam: Bohâlțeanu & Asociații recrutează avocați stagiari
    Consiliul Concurenței folosește în investigații ‘procedura forensic’, o metodă de verificare demnă de FBI. Noile tendințe din această practică, analizate de Manuela Guia, Partener D&B David și Baias, unul dintre cei mai buni avocați de concurență de pe piața locală (partea I)
    Cum lucrează echipa de concurență de la D&B David și Baias. O discuție cu Manuela Guia (Partener) despre “shadowing”, “fishing expeditions” și strategii de apărare (partea a II-a)
    LegiTeam: Voicu & Filipescu is looking for lawyers
    LegiTeam: Wolf Theiss is looking for lawyers
    LegiTeam: Maravela|Asociaţii is looking for a consultancy associate
     
    Citeste pe SeeNews Digital Network
    • BizBanker

    • BizLeader

        in curand...
    • SeeNews

      in curand...