Bulgaria's Merciful Competition Watchdog Lowers Fines

Business | March 21, 2011, Monday // 16:04|  views

Bulgaria's Competition Protection Agency has slashed the unfair competition fines. Photo by cpc.bg

Bulgaria's Competition Protection Commission has decided to lower the fines that it imposes for unfair competition.

As of Monday, March 21, the Commission is starting to calculate the fines for breach of the competition legislation as a percentage of a company's profit rather than of its revenues.

What is more, the maximum fine that can be imposed in cases of grave violations will be 8% of the net revenues – instead of the 10% allowed earlier.

The unfair competition sanctions are applied in cases when businesses use non-market methods to steal their competitors' clients through promotions, imitation, advertising, etc.

For the first time, the Bulgarian Competition Protection Commission has divided the unfair competition violations into categories – for light violations the respective companies will be fined by up 2% of their previous year's profit; for medium violations – up to 5%; for severe violations – up to 8%. In the event of a company not having made net profits the previous year, the fines in the different categories are BGN 10 000, BGN 30 000, and BGN 50 000.

The gravity of the unfair competition violations is judged by their durations, and their effect on a market segment. The watchdog has further introduced options for reducing the fines if the violators pay their fines immediately.

As far as the anti-trust and cartel legislation is concerned, the Competition Protection Agency is preserving the same fines – up to 10% of a company's turnover from the previous year.

In a report the Bulgarian daily Dnevnik says that the competition watchdog rarely fines anybody by more than 1% of their last year's turnover.

The efficiency of the Bulgarian Competition Protection Commission has been questioned after recently the Bulgarians organized a mass protest via Facebook against the rising gas prices claiming that the producers and importers of oil products have made a cartel agreement. The matter is still investigated by the government.

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Tags: competition, Competition Protection Commission, Competion protection agency, cartel, cartel agreement, unfair competition


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