Summary of Commission Decision of 17 December 2018 relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union (Case AT.39849 — BEH Gas) (notified under document number C(2018) 8806 final)
Date: 2018-12-17
Institutions: Directorate-General for Competition, European Commission
Subjects: Bulgaria, EU competition policy, control of restrictive practices, dominant position, energy grid, energy transport, gas pipeline, gas supply, sanction (EU), storage of hydrocarbons








C_2019121EN.01000801.xml










1.4.2019   


EN


Official Journal of the European Union


C 121/8






Summary of Commission Decision
of 17 December 2018
relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union
(Case AT.39849 — BEH Gas)
(notified under document number C(2018) 8806 final)
(Only the English text is authentic)
(2019/C 121/06)

On 17 December 2018, the Commission adopted a decision relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union. In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003 (1), the Commission herewith publishes the names of the parties and the main content of the decision, including any penalties imposed, having regard to the legitimate interest of undertakings in the protection of their business secrets.

1.   INTRODUCTION









(1)


The Prohibition Decision pursuant to Article 7 of Regulation (EC) No 1/2003 (‘the Decision’) is addressed to Bulgarian Energy Holding EAD (‘BEH’), its gas supply subsidiary Bulgargaz EAD (‘Bulgargaz’) and its gas infrastructure subsidiary Bulgartransgaz EAD (‘Bulgartransgaz’), (together ‘the BEH group’ or ‘the parties’), for infringing Article 102 of the Treaty on the Functioning of the European Union (‘TFEU’).












(2)


The Decision establishes that the BEH group has refused other companies' access to key gas transport and storage infrastructure controlled by the BEH group, thereby protecting the dominant position of its supply arm (Bulgargaz) on the Bulgarian gas supply markets. The abuse started on 30 July 2010, and was ongoing until 1 January 2015.












(3)


On 23 November 2018 and 12 December 2018 the Advisory Committee on Restrictive Practices and Dominant Positions issued a favourable opinions on the Decision pursuant to Article 7 of Regulation (EC) No 1/2003 and on the fine imposed on the BEH group.




2.   MARKET DEFINITION AND DOMINANCE









(4)


The Decision concludes that the relevant product and geographic markets for the purpose of this case are: (i) capacity-related services on the Bulgarian Transmission Network, (ii) capacity-related services on the Romanian Transit Pipeline 1 (iii) capacity-related services for storage at UGS Chiren (iv) the downstream wholesale gas market (supplied via the Bulgarian Transmission Network) and (v) the retail supply of gas to large end customers connected to the Bulgarian Transmission Network (together ‘the gas supply markets in Bulgaria’).





The BEH group dominance









(5)


Through Bulgartransgaz, the BEH group owns and operates the Bulgarian Transmission Network, as well as the underground gas storage facility Chiren (‘UGS Chiren’). Through Bulgargaz, the BEH group also controlled, during the investigated period, the full capacity on the Romanian Transit Pipeline 1 — via a long-term capacity reservation. Bulgargaz, also supplied the vast majority of customers on the wholesale gas market in Bulgaria and almost all retail customers connected to the Bulgarian Transmission Network. The Decision establishes that the BEH group, during the investigated period, was dominant on all the markets listed in paragraph (4).




3.   ABUSE OF A DOMINANT POSITION









(6)


There is a general regulatory obligation on the transmission system operators to provide third-party access to the Bulgarian Transmission Network and the UGS Chiren. The Bulgarian Transmission Network, the UGS Chiren and the Romanian Transit Pipeline 1 are all indispensable in order to operate on the gas supply markets in Bulgaria.












(7)


The Decision establishes that the BEH group, despite its regulatory obligations to provide third-party access to its gas infrastructure, has implemented a consistent strategy of (i) preventing, restricting and/or delaying access to the transmission network and storage, (ii) designing discriminatory access rules for storage which ensured that the priority access was given to the company belonging to the BEH group, i.e. Bulgargaz and (iii) hoarding capacity (reserving capacity that it consistently did not use) on the only import pipeline bringing gas into Bulgaria, the Romanian Transit Pipeline 1.












(8)


All the three companies concerned, BEH, Bulgargaz and Bulgartransgaz equally and directly participated in the infringement and together developed a strategy in order to protect the dominant position of Bulgargaz on the gas supply markets in Bulgaria. The BEH group has therefore engaged in a single and continuous infringement in violation of Article 102 TFEU.





The anti-competitive effects









(9)


The BEH group's behaviour was likely to have anticompetitive effects. Evidence shows that interested new entrants were prevented from entering or expanding on the gas markets in Bulgaria, thereby perpetuating BEH group's dominance. The BEH group's conduct cannot be objectively justified.





Duration









(10)


The abuse started when demand to access the gas infrastructure controlled by the BEH group materialized, and subsequently it was not satisfied due to the BEH group's refusal, i.e. with the first access request, which took place on 30 July 2010, and was ongoing until 1 January 2015, when the BEH group started granting objective, transparent and non-discriminatory access to its infrastructure.




4.   FINE









(11)


The fine imposed on the BEH group for the abusive conduct is calculated on the basis of the principles laid out in the 2006 Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation (EC) No 1/2003. The Decision concludes that the final amount of the fine imposed on the BEH group is EUR 77 068 000.






(1)  OJ L 1, 4.1.2003, p. 1. Regulation as amended by Regulation (EC) No 411/2004 (OJ L 68, 6.3.2004, p. 1).