Bulgaria: Remedies imposed on fuel companies following cartel investigations

In this case, the implicated companies were:

• Shell Bulgaria;
• Rompetrol Bulgaria EAD;
• Eko Bulgaria EAD;
• OMV Bulgaria OOD;
• Petrol AD;
• NIS Petrol EOOD;
• Lukoil Bulgaria EOOD; and
• the Bulgarian Gas and Petrol Association.

Investigation

The investigation was launched following a 2015 Commission sector analysis of the fuel and diesel retail markets.

The Commission found indications of price parallelism which was not economically justified. In particular, it found that the retail price of some petrol companies in Bulgaria did not always follow the wholesale price and producers' prices. Thus, when the wholesale price and producers' prices increased, the retail prices of some market participants were adjusted in a relatively short period. However, when the wholesale price and producers' prices decreased, the retail price of the same market participants was adjusted more slowly and not always in corresponding percentages.

Correspondence

Dawn raids were conducted on the premises of some of the investigated parties during the proceedings. The Commission found evidence of email exchanges among representatives of different petrol companies. However, the content of the emails could not be made public as sensitive information had to be redacted. Based on the public information, it was evident that Eko Bulgaria was especially active in communication, as it had the largest number of emails discovered. Thus, for instance, in correspondence between Eko Bulgaria and Lukoil, Lukoil sent tables with information about market shares. Information was also exchanged regarding the opening of petrol stations by new market player Mareshki. Also, in correspondence from NIS Petrol, comments by employees were found saying that the fuel's margin had been at its highest in the past 10 years and that the main price factor was the prices of other market participants. Other correspondence was also sent and received between employees and managers of Eko Bulgaria, Nis Petrol, Shell and Lukoil.

Defence

A number of arguments were given by the petrol companies in their defence, particularly that only the exchange of individual market strategies can lead to concerted practices. However, such strategies were never discussed or disclosed to other market participants.

Comment

Despite the emails and other evidence collected, the Commission found that the market of fuel and diesel is competitive and that the market environment is much better than it was a decade ago. The Commission also discovered that there are a number of market participants (major and minor) in the fuel and diesel retail markets. The minor participants are generally stable and increase their market shares, which, according to the Commission, is positive for the market. However, the Commission established that the market is predisposed to price coordination. Hence, the Commission found that the remedies proposed by the investigated parties would ensure additional market stability. In particular, the investigated parties undertook to introduce internal documents which prohibit:

• contact and the exchange of information between competitors and employees;
   
• contact between the employees of competitive petrol stations; and
   
• discussions regarding trade information within the Bulgarian Petrol and Gas Association.

No penalties were imposed.