With Decision No.1046 issued on 20 September 2018, the Bulgarian
Commission for the Protection of Competition (the
"CPC") gave the green light to the
acquisition of Rapido Express and Logistics OOD by its competitor
Speedy AD, in accordance with Article 26(1) of the Act for the
Protection of Competition (the
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
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 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
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
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.
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