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Voted Amendments to the Competition Protection Act

On 09 July 2015 the Parliament adopted the long-discussed Draft re amendment and supplement of the Bulgarian Competition Protection Act.

After receiving certain criticism and following the tense debate in the sector, new legislative proposals re amendment of the controversial provisions were filed for voting between first and second reading of the draft.

Eventually, most of these were adopted and a lot of the initially proposed clauses were dismissed (e.g. CPC’s powers to assess the general terms/contracts of undertakings, having aggregate annual turnover for the past year above BGN 50 million).

Below are some of the key changes, which have passed second reading:

1) The so called “abuse of stronger bargaining power” was introduced instead of “significant market power“.
Undertakings having stronger bargaining powers should refrain from unfair commercial practices, which may harm the interests of the weaker counterparty/the consumers.
Such forms of abuse might be: unjustified refusal for supply/purchase of certain goods or services; imposing excessive or discriminative terms or unjustified termination of commercial relations.

2) In case of breach of the prohibition mentioned above, the new law provides a penalty to the amount of 10% of the annual sales of the product concerned (but no less than BGN 10,000). In case that no sales have been made in the preceding year for this product, the sanction would be between BGN 10 000 and 50 000.
I.e. the new law envisages relatively mitigated sanctions in comparison to the initially proposed ones (which were a percentage of the average aggregate annual turnover of the undertaking as a whole).

3) The new law introduces changes to the Food Act, by prohibiting certain arrangements between the parties to a contract, such as:
- restrictions for offering/purchasing goods or services to/from third parties;
- restrictions for offering third parties the same/more favourable conditions, etc.;
- prohibition for unilateral termination of the contract, unless explicitly provided, etc.

The voted amendments were promulgated in the State Gazette on 24.07.2015.