German-Bulgarian Chamber of Industry, Commerce Opposes Changes to Competition Law

Business | May 21, 2015, Thursday // 15:04
Bulgaria: German-Bulgarian Chamber of Industry, Commerce Opposes Changes to Competition Law

The German-Bulgarian Chamber of Industry and Commerce (GBCIC) has risen against a set of proposed changes to the Competition Protection Act

“The bill continues to contain provisions that are detrimental to the business environment, to competition, and to consumers,” the GBCIC says in a media statement.

According to the GBCIC, the main problems that could arise as a result of the potential adoption of the amendments to the Competition Protection Act are related to the introduction of the concept of “significant market power”, the requirement that the Commission for Protection of Competition approve standard contracts and the general conditions applied in the relations between traders and their suppliers, as well as the penalties envisaged in the bill.

The GBCIC has sent letters to President Rosen Plevneliev, Parliament Speaker Tsetska Tsacheva, and Prime Minister Boyko Borisov to inform them about its stance on the matter.

According to the entity, authorizing Bulgaria’s competition watchdog to develop criteria for distinguishing between “significant market power” and “dominant position” means that the Commission will create rules and at the same time be in charge of their application, thereby violating the constitutionally-enshrined principle of separation of powers.

This would provide the administration with unlimited rights and entail a risk of intervention into market conditions that is subject to no control whatsoever, including judicial review.

The GBCIC believes that the introduction of the requirement for approval by the competition watchdog and the publication of the standard contracts and the general conditions applied in the relations between traders and their suppliers is a discriminatory measure and that it constitutes intervention into the freedom of contract because it only applies to companies with a turnover of over BGN 50 M for the previous year.

Apart from that, the GBCIC complains that no motives have been provided for setting the threshold at BGN 50 M.
The GBCIC is also worried by the introduction of a penalty amounting to 10% of the annual turnover of a company for abuse of significant market power.

The GBCIC finds that the penalty is economically unfeasible and that it poses a threat to the operations of local and foreign investors in Bulgaria.

The GBCIC argues that other EU countries shy away from levying a fine of such proportions even in cases of breach of fair competition and the emphasis has been put on compensating the affected rival.

The GBCIC reminds that the European Parliament, the European Commission, the EU, and the German government back the EU-wide Supply Chain Initiative as a solution to unfair trading practices.

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Tags: German-Bulgarian Chamber of Commerce and Industry, Competition Protection Act, Commission for Protection of Competition, significant market power, dominant position, unfair competition
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