The European Commission has fined Bulgarian Energy Holding (BEH), its gas supply subsidiary Bulgargaz and its gas infrastructure subsidiary Bulgartransgaz (the BEH group) €77.068 million for blocking competitors’ access to key gas infrastructure in Bulgaria, in breach of EU antitrust rules.

Commissioner Margrethe Vestager, in charge of competition policy, said, on Monday: “Consumers in all Member States should enjoy the benefits of an integrated and competitive single European energy market. For years, Bulgarian natural gas consumers have been denied a choice of suppliers because the BEH group refused to give access to its gas infrastructure to other wholesale gas suppliers. With today’s decision, we will promote the development of an open and competitive energy market to the benefit of consumers in Bulgaria, in line with Energy Union objectives.”

BEH is the vertically integrated incumbent state-owned energy company in Bulgaria. One subsidiary, Bulgartransagaz, controls the gas infrastructure in Bulgaria. Another subsidiary, Bulgargaz, supplies gas to customers in Bulgaria. The decision finds that the BEH group holds dominant positions both in the gas infrastructure markets and in the gas supply markets in Bulgaria. It also finds that BEH and its subsidiaries, abused their dominant positions by foreclosing entry into the gas supply markets in Bulgaria by unduly restricting access to the infrastructure it owned and operated. BEH used the dominant position of one subsidiary, Bulgartransgaz, to protect the near monopolistic position of its other subsidiary, Bulgargaz, on supplying gas. In addition, Bulgargaz hoarded capacity on the only import pipeline bringing gas through Romania to Bulgaria so that it could not be used by potential competitors.

Between 2010 and 2015, the BEH Group blocked the access to the following gas infrastructure:

• the domestic Bulgarian gas transmission network
• the only gas storage facility in Bulgaria and
• the only import pipeline bringing gas into Bulgaria, which was fully booked by BEH.

Without access to this essential infrastructure, it was impossible for potential competitors to enter wholesale gas supply markets in Bulgaria. This prevented any development of competition and ensured a near monopoly for Bulgargaz.

The Commission concluded that this behavior by the BEH group is in breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant market position. As a result, the Commission decided to impose a fine on the company.

The removal of barriers to entry for competitors will allow the Bulgarian wholesale gas market to function more efficiently, with more buyers and sellers, and give Bulgarian consumers better prices and a choice of gas suppliers. This will be further facilitated by the recent opening of the gas interconnector between Bulgaria and Greece, for which the Commission approved public support on 8 November 2018, and the Bulgaria–Romania–Hungary–Austria (BRUA) energy cooperation project that will enable Bulgarian wholesalers to diversify their supply sources.

Transgaz is under investigation

EC’s decision forms part of the Commission’s efforts to improve competition between gas suppliers and security of supply in South-Eastern Europe to ensure open and competitive gas markets, in line with the Energy Union objectives. In May 2018, the Commission adopted a decision imposing binding commitments on Gazprom which ensures free flow of gas on the upstream level in the region (AT.39816). Furthermore, the Commission has an ongoing investigation concerning Romanian transmission system operator Transgaz for potential export restrictions of gas (AT.40335). In a separate case concerning BEH, the Commission adopted in December 2015 a decision rendering legally binding the commitments offered by BEH to end competition restrictions on Bulgaria’s wholesale electricity market.