Proceedings, fines and sanctions
The Bulgarian Commission for Protection of Competition initiated legal proceedings against EVN Bulgaria EP, EVN Bulgaria EC, EVN TSEE and EVN Bulgaria to evaluate the possible infringement of legal regulations. These proceedings involved allegations of insufficient support and the obstruction of the registration process on the free market as well as the change of suppliers. The proceedings before this commission are still pending. The Bulgarian Commission for the Protection of Competition also initiated eight other proceedings against EVN Bulgaria EC and EVN Bulgaria EP, which are based on possible violations of Article 15 (unlawful agreements, resolutions and concerted practices) and Article 21 (misuse of a monopoly or controlling market position) of the Bulgarian Competitive Protection Act.
In seven of the proceedings, the commission decided that EVN Bulgaria EC and EVN Bulgaria EP acted in agreement with all legal requirements. Two of these decisions are legally binding, while the plaintiffs have filed appeals against five other decisions. A violation of competition law was determined in one case, and EVN Bulgaria EP has appealed this decision.
The antimonopoly commission in Moscow (FAS) issued a legally binding directive that declared a 1 June 2010 decision by the city government to be in violation of competitive law. The original decision by the city government transferred the MPZ1 waste incineration plant to the investor EVN and also required and authorised an increase in the capacity to 700,000 tonnes per year. This decision shall be final and binding.
- GRI indicator: Lawsuits in consequence of anti-competition practice, cartel or monopoly formation (G4-SO7)
In March 2014, the Bulgarian State Energy and Water Regulatory Commission (EWRC/the regulatory authority) started administrative proceedings to revoke EVN Bulgaria EC’s licence. This action was justified by reference to EVN Bulgaria EC’s offset of certain receivables due from the national electricity company Natsionalna Elektricheska Kompania EAD (NEK), which the regulatory authority claimed led to the reduction of NEK’s cash reserves and impaired the company’s ability to meet its legal obligations. A decision by the court of arbitration of the Bulgarian Chamber of Industry and Commerce on 15 September 2016 confirmed that the offset of receivables due from NEK by EVN Bulgaria EC was justified.
The EWRC also carried out investigations at EVN Bulgaria EP in connection with various violations. Most of the fines involved violations of the requirements to maintain records on the installation of commercial metering devices (CMD). The alleged violations are based, for example, on the absence of signatures by customers, witnesses or employees of EVN Bulgaria EP on these records. As a result of the audit, the regulatory authority has imposed fines in 304 cases to date for a total of BGN 6.08m (EUR 3.10m). EVN Bulgaria EP has filed appeals against all of these fines with the responsible Bulgarian court: 103 judgments were reversed, 172 were confirmed and the remaining proceedings are currently pending.
- GRI indicator: Fines/sanctions as a result of illegal activities (G4-SO8); Incidents of non-compliance with product safety and customer health requirements (G4-PR2); Fines for non-compliance with laws and regulations concerning the provision and use of products and services (G4-PR9)