(Bloomberg) -- Bulgarian Energy Holding, the company that groups Bulgaria’s biggest state-owned utilities, inflicted a historic court defeat on the European Union’s antitrust arm, as judges toppled a €77 million ($81.6 million) fine for blocking rivals’ access to infrastructure.
The EU’s General Court on Wednesday totally overturned the European Commission’s 2018 antitrust decision that the firm had unfairly leveraged its market dominance over local gas supplies. Judges at the Luxembourg tribunal also said the firm’s rights of defense had been infringed.
“It’s not every day that the court annuls the finding of abuse based on a wrong assessment of the facts,” said Assimakis Komninos, one of the lawyers at White & Case who represented Bulgarian Energy Holding. “This is the first time ever that this was sufficient in and of itself to lead to a full annulment.”
In the antitrust order struck down by the court, EU regulators fined BEH, its gas supply unit Bulgargaz EAD and its gas infrastructure unit Bulgartransgaz, concluding that for years, Bulgarian consumers were denied a choice of suppliers because the BEH group refused to give access to its gas infrastructure to other wholesale gas suppliers. Under EU law it’s not illegal to dominate a market — but abusing that dominance can attract massive fines.
The Brussels-based commission said it will study the judgment — which can be appealed at the bloc’s top court — and will “reflect on possible next steps.”
The ruling adds to a mixed record in court for EU Antitrust Commissioner Margrethe Vestager — who’s on temporary leave to pursue a bid for the European Investment Bank presidency. Last year, she lost another abuse of dominance case, when the EU court annulled Qualcomm Inc.’s €997 million-euro antitrust fine for allegedly pressuring Apple Inc. to only buy its 4G chips, though this ruling was mainly based on procedural errors.
The judgment “is yet another confirmation that Bulgartransgaz has secured all the necessary conditions for securing transparent and non-discriminative access for third parties,” Chief Executive Officer Vladimir Malinov said in a statement. “Bulgartransgaz is a reliable and stable partner in the development and integration of the European energy market,” Malinov said.
At issue was access to a Romanian Pipeline 1, which was key to transport Russian gas to Bulgaria, without any alternative available. While Bulgargaz wasn’t the owner, it had exclusive use of the pipeline, making it dominant.
The court said “any irregularity that might, in theory, have been committed” in relation to the gas transmission network and the Chiren storage facility “could not constitute an infringement of EU competition rules because no company could have entered the Bulgarian gas market without access to the Romanian Pipeline 1.”
Bulgargaz’s confrontations with the EU haven’t ended with the 2018 case. It has recently returned to the EU’s radar, with regulators quizzing the firms about a gas transit deal between the state-owned unit and Turkey’s Botas.
Bulgaria-Turkey LNG Supply Pact Probed by EU Antitrust Watchdog
The deal, signed in January, will allow Bulgargaz to import liquefied natural gas via Turkey’s terminals and grid for 13 years. The commission said Oct. 23 it would “not hesitate to take appropriate action” if it finds antitrust breaches.
The EU is also assessing the legality of a new Bulgarian levy on Russian natural gas piped across its territory after the move triggered criticism from neighboring countries.
The case is: T-136/19, Bulgarian Energy Holding and Others v. Commission.
(Updates with background on significance of the win starting in first paragraph)
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