Bulgaria: Speedy AD sanctioned by competition authority for failure to provide complete and accurate information

At the same time, the CPC sanctioned Speedy AD for failing to provide complete and accurate information in its notification to the Competition Authority, which has a material and substantial importance for the evaluation of the concentration deal.

Failure to provide complete information about the deal was determined to be a violation of Article 47(5) of the APC, which lists a general obligation on undertakings to provide full and accurate informational assistance to the Competition Authority.
What is interesting in the case is that this is the first time in the practice of the CPC in which it sanctions an undertaking for failure to provide complete and accurate information about a concentration under Article 47(5), and at the same time issues clearance for it.

The concentration

The CPC accepted that the notified operation, under which Speedy AD obtains direct and sole control over its competitor Rapido Express and Logistics OOD leads to a concentration between undertakings, within the meaning of Article 22(1), pt. 2 of the APC. In accordance with Article 24(1) of the Act, the participating undertakings are obliged to inform the CPC in advance of their intention to complete a concentration, when the sum of the turnovers of all the undertakings concerned for the previous financial year is higher than BGN 25 million.
The law also has an additional cumulative requirement with two alternative criteria, namely the turnover of at least two of the undertakings participating, or the turnover of the target to be higher than BGN 3 million. In this specific case, it was estimated that these thresholds had been met and there was an obligation to notify the CPC of the intended concentration, which the undertakings had fulfilled.

The CPC authorises the concentration if it does not lead to the establishment or strengthening of a dominant position, which will materially affect effective competition on the markets on which the operation will have an impact. According to the controlled analysis by the CPC, the concentration will have an impact on the market of provision of internal courier services and the market of provision of international land-based courier services under which there is a horizontal overlap between the activities of the participants in the concentration.

After the relevant market analysis, it was established that the leaders in the two markets in Bulgaria are, respectively, Ekont Express EOOD for the internal courier services in Bulgaria with around a 50 % share, and DHL Bulgaria EOOD for the international courier services with around a 40 % market share.
After conducting the necessary analysis of the concentration, it was established that the structure of the market would remain unchanged as the planned deal does not possess the nature to lead to the establishment of dominant position, because the market share of Speedy AD after the concentration is going to be no larger than 40 %. Therefore, the Commission found no evidence to lead to the rejection of the authorisation of the proposed concentration.
 

Sanctioning Speedy AD

However, there were enough reasons for the CPC to penalise Speedy AD for failure to provide the information needed to conduct an objective evaluation of the deal. The reason for imposing the sanction was an opinion of a registered competitor of Speedy AD, Tip-Top Courier AD, which informed the CPC about a prior concentration deal, according to which Rapido Express and Logistics OOD had acquired the going concern of its competitor D&D Express EOOD.
It was held that Speedy AD was obliged to provide complete and accurate information to the Competition Authority about the activities and the market presence of the undertakings participating in the concentration - something which the notifier failed to do in this case by omitting to disclose the prior deal. Therefore, Speedy AD was penalised with 0,2 % of its turnover for 2017, or the sum of BGN 205,622.

What is interesting is that this is the first instance in which the CPC penalises an undertaking for failing to provide complete and accurate information specifically for a concentration. Up until now, this violation of Article 47(5) of the Act has been applied only in instances of unfair competition.
The provision issues a general obligation to undertakings to provide full and accurate information to the Competition Authority when being requested to do so. It seems that the provision also entails information contained in concentration notification. It remains to be seen whether Speedy AD is going to file an appeal against the sanction and whether such an appeal would be successful.

This article was co-authored by Rosen Manchev.

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