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First Sanction for Abuse of Superior Bargaining Position

20/07/2016

By its landmark decision of 26 May 2016, the Bulgarian Commission for Protection of Competition (the "CPC") imposed for the first time a pecuniary sanction for abuse of superior bargaining position on Siemens EOOD ("Siemens") in a case of unmotivated refusal to supply.

The CPC stated that the notion of superior bargaining position refers to a position characterizing case-specific relations between the parties to a case. Further, its existence shall be assessed on a case-by-case basis, by taking into account the market structure. The competition authority further specified that an undertaking could be found to be in a superior bargaining position at any stage of its commercial relations with another undertaking, including, but only, at the pre-contractual stage.

In the examined case, the claimant and Siemens had a long-standing commercial relationship. A district heating company awarded the claimant a contract for maintenance and repair works of a Siemens' product (Siemens was an unsuccessful bidder in the same procurement procedure). Under the contract terms and conditions, accepted by the claimant, the spare parts could only be replaced with Siemens-produced parts. The claimant sent a letter to Siemens asking for an offer for the supply of such parts. Siemens refused to supply the parts with an unmotivated letter.

Sanctions for abuse of superior bargaining position can amount to up to 10 % of the undertaking's turnover generated during the last business year from the sale of the specific goods in question. Where there were no such sales, the pecuniary sanction is capped at EUR 25,550. In the present case, as in the year 2015 Siemens had not sold any such parts, the CPC imposed a pecuniary sanction of EUR 17,900.

Authors

Picture of Gabriela Edreva
Gabriela Edreva