Bulgaria grants immunity from cartel fines for first time

Bulgaria

In two decisions on 5 December 2019, the Bulgarian Commission for Protection of Competition (CPC) imposed sanctions on 24 construction companies for infringement of Article 15 of the Bulgarian Competition Protection Act (CPA) and Article 101 of the TFEU. Fines of almost BGN 400,000 (EUR 205,000) were imposed for forming bid-rigging cartels aimed at manipulating two public-procurement orders under the national energy-efficiency programme in the municipalities of Targovishte and Gotse Delchev.

Ultimately, however, immunity and a reduction of fines were granted to three companies through the first-time use of Bulgaria's leniency programme for cooperating suspects in antitrust cases.

First leniency applications

The CPC confirmed that for the first time in its antitrust practice, it received three leniency applications for immunity and fine reductions from the participants in a secret bid-rigging cartel. According to the CPC, the three companies responded by cooperating actively in the investigation and providing important evidence that proved the allegations. As a result of their cooperation, one company was granted full immunity from sanctions while two other companies received reductions in fines.

Bulgarian leniency programme

Based on the EU model, the Bulgarian leniency programme was adopted in 2011 and covers cartels exclusively. The programme's aim is to ensure greater transparency for the CPC policy of granting immunity and reductions of fines to undertakings participating in secret cartels.

The CPA sets down the main conditions for granting immunity or fine reductions. According to the law, only one undertaking can be granted immunity from sanctions for cartel activity. Immunity is usually granted to the first company to confess its involvement in a secret cartel and provide the required information and evidence. In addition, the undertaking must end its involvement in the cartel and cooperate fully, genuinely and voluntarily on a continuous basis throughout the procedure.

Undertakings that do not meet the requirements for immunity can be granted fine reductions of up to 50% if they submit evidence of significant importance to the investigation. As a result, both the quality of evidence and the timing of its submission play an important role in the CPC's decision to offer fine reductions. The first undertaking in this group can be granted a fine reduction of 30% to 50%, the second company 20% to 30%, and other companies 10% to 20%.

For more information on cartel issues and the leniency programme in Bulgaria, contact your regular CMS source or local CMS experts: Nevena Radlova and Tatyana Yosifova.

This article was co-authored by Kalina Krastanova, Trainee at CMS Sofia.