BULGARIA
Legislative Updates
FDI Screening Regime
As we move into 2025, Bulgaria is preparing to finalise the full implementation of its foreign direct investment (FDI) screening regime, which officially came into force in 2024 following amendments to the Investment Promotion Act. Currently, a transitional period is in effect during which FDI notifications are not required, as the necessary implementing regulations have yet to be enacted. In December 2024, two essential drafts—the Regulations on the Organisation and Operation of the Interinstitutional FDI Screening Council (the authority responsible for FDI screening in Bulgaria) and Amendments to the Implementing Rules of the Investment Promotion Act—were published for public consultation. Their adoption, anticipated later in 2025, will mark a critical step in ensuring the operational functionality of the FDI screening regime.
These two pending instruments are key to operationalising Bulgaria's FDI screening framework. The proposed Regulations on the Organisation and Operation of the Interinstitutional FDI Screening Council define the structure, roles, and operational procedures of the Council, detailing its composition, decision-making processes, and protocols for handling classified information. The Amendments to the Implementing Rules of the Investment Promotion Act integrate the FDI screening process into Bulgaria's investment framework by establishing details on FDI application submission and the processing and allocation of responsibilities between the Bulgarian Investment Agency, the FDI Screening Council, and the Secretariat of the Security Council to the Council of Ministers.
Another crucial step towards the operation of the Bulgarian FDI screening regime is the formal designation of the FDI Screening Council's members. Once the Amendments to the Investment Promotion Act's Implementing Rules are enacted—expected in early 2025—the selection criteria will be in place, enabling the prime minister to appoint the FDI Screening Council. With the Council operational, the authority will begin reviewing FDI applications and implementing the screening process. For investors, this development will provide muchneeded clarity and predictability.
Block Exemption Decision
In January 2024 the Commission on Protection of Competition (the "CPC") adopted a decision for the block exemption of certain categories of agreements, decisions, and concerted practices with effect on national markets from the prohibition in Art. 15, para. 1 of the Competition Protection Act (the "CPA"). Through this decision, the CPC continued its approach to set the scope and conditions for the exemption by virtue of a direct reference to EU block exemption regulations and guidelines.
Guidelines on Merger Control
In December 2024 the CPC adopted Guidelines on Merger Control (the "Merger Control Guidelines"), which aim not only to raise awareness of CPC investigations but also to ensure transparency, clarity, and efficiency in the implementation of the merger control regime.
The Merger Control Guidelines provide a detailed description of the entire merger assessment process, addressing aspects related to the obligation to notify, clarifications on acquisition of control, methods for calculating turnover, and the merger assessment procedure. The Merger Control Guidelines align with the current applicable guidelines of the European Commission.
CPC Activity at a Glance
Dawn Raids
In 2024 the CPC carried dawn raids at companies operating in different economic sectors, such as: in the business of construction equipment over suspicions of a cartel for potential bid-rigging of public procurements for construction equipment, at Froneri Bulgaria EOOD in view of an alleged abuse of dominance on the market of ice cream distribution, at the Association of Bulgarian Insurers as part of an investigation of a potential price fixing cartel, as well as at MUSICAUTOR for potential abuse of dominance through unfair practices for the determination and payment of remuneration to authors.
Major Sanctions
Vodosnabdiavane i Kanalizatsiya - Varna OOD was fined BGN 336,146 (approx. EUR 168,000) for abusing its monopoly by requiring consumers to fund the construction of public water infrastructure to access its services. In addition, the CPC ordered a revision contractual terms to be implemented within 60 days of the notification of the decision.
Major Ongoing Cases
The CPC has several ongoing investigations, focusing on insurance companies for a potential cartel regarding the provision of the mandatory insurance policy "Civil liability" to taxi drivers, Tir Parking Ruse OOD regarding potential abuse of dominance through unequal disadvantageous treatment of truck drivers entering via the border with Romania.
Sector Inquiries
The CPC conducted a sector analysis of the markets for the production and trade of sunflower oil and flour. It concluded that the recent price trends were a result of objective economic factors, thus no measures have been further taken in this respect.
Major Merger Control Cases
In 2024 the transactions reviewed for merger clearance spanned a variety of industries, including retail parks, rental market, healthcare, electric vehicle charging stations, the fitness industry, gambling and gaming, pharmaceuticals, road construction, and information technology.
The following merger cases reviewed by the CPC in 2024 worth being highlighted:
Merger clearance regarding the acquisition of Viva Corporate Bulgaria EOOD ("Viva Corporate") by United Group Bulgaria EOOD ("United Group Bulgaria")
United Group Bulgaria is part of United Group, which is wholly owned by Slovenia Broadband S.a r.l. Viva Corporate is a Bulgarian company controlled by the Luxembourg-based Viva Corporate S.a r.l. The transaction involved United Group Bulgaria acquiring direct sole control over Viva Corporate Bulgaria and indirect sole control over the following entities: Bulsatcom EOOD, Bulsatcom - Sales EOOD, Internet Group EOOD, Powernet EOOD, and Extremenet EOOD (the "Transaction").
According to the CPC decision issued in February 2024, the Transaction results in a horizontal overlap in the retail TV programme distribution and retail fixed internet access markets, both of which are national in scope. Additionally, United Group Bulgaria and Viva Corporate have vertical relationships in the wholesale TV programme distribution market, which the CPC defines as national in scope.
Given the market positions of both entities and the structure of the relevant markets, the CPC concluded that the Transaction raises competition concerns regarding the market power of the newly formed group and reduces the number of competitors capable of exerting competitive pressure on the combined entity. As a result, the CPC initiated an in-depth investigation to assess the potential impact of the Transaction on the relevant markets. After thoroughly analysing all data collected during the investigation, the CPC concluded that the Transaction would not result in a significant impediment to effective competition in any of the markets assessed. The CPC therefore cleared the Transaction unconditionally.
Merger clearance regarding the acquisition of control over PPF Telecom Group B.V. ("PPF") by Emirates Telecommunications Group Company PJSC ("e&")
The transaction entails e& acquiring direct control over PPF, which exercises indirect control over two entities in Bulgaria: Yettel Bulgaria EAD, a provider of telecommunications services; and Cetin Bulgaria EAD, a provider of telecommunications infrastructure services (the "Transaction"). The CPC evaluated that the Transaction will impact the following vertically connected product markets: the provision of wholesale international roaming services; wholesale voice call termination on mobile networks; and wholesale voice call termination on fixed networks in the countries where the parties involved in the concentration operate (upstream); and the provision of retail fixed voice telephony services and retail mobile voice telephony services in Bulgaria (downstream).
Following its analysis, the CPC concluded that the Transaction is unlikely to significantly hinder effective competition in the relevant vertically connected
markets, particularly through the creation or reinforcement of a dominant position. The CPC therefore approved the Transaction unconditionally.
Merger clearance regarding the acquisition of Tokuda Bank AD ("Tokuda Bank") by BulgarianAmerican Credit Bank AD ("BACB")
Both BACB and Tokuda Bank are licensed credit institutions by the Bulgarian National Bank. The transaction involves BACB acquiring sole control over Tokuda Bank, which is controlled by Tokushukai Incorporated, Japan (the "Transaction").
According to the decision of the CPC issued in July 2024, BACB aims to diversify its portfolio by focusing on corporate clients and sustainable sectors, including renewable energy and EU-funded projects, while expanding its retail banking services and offerings.
The CPC analysed BACB's and Tokuda Bank's activities in Bulgaria and identified a horizontal overlap in banking and financial markets, specifically retail banking, wholesale banking, payment services, and financial market services. Following its analysis, the CPC concluded that post-transaction, the market shares of both participants across all analysed segments remain insignificant. Consequently, the Transaction does not pose a risk of significantly impeding effective competition or creating a dominant position. The CPC therefore cleared the Transaction unconditionally.
Unfair Competition Cases
The CPC imposed fines for various unfair competition practices, such as:
- a fine of BGN 25,640 (approx. EUR 12,800) on AGRIA-2009 EOOD for violation of good commercial practice and misleading consumers as to the actual origin and manufacturer of products.
- on Vuum.BG OOD for violations committed in connection with the imitation of appearance of products in the amount of BGN 274,394 (approx. EUR 137,197); for violation of the prohibition against misleading consumers with respect to the essential characteristics of goods or services in the amount of BGN 137,197 (approx. EUR 68,598); and for violation of the general prohibition of unfair competition in the amount of BGN 137,197 (approx. EUR 68,598).
- a fine of BGN 98,415 (approx. EUR 49,207) for an infringement committed by Sana Trade OOD. It was established that Sana Trade OOD conducts a "Loyal Customer" program, which is valid for medicines dispensed under the National Health Insurance Fund, and every twelfth purchase of medicine from the company's pharmacies is free of charge. This is contrary to good commercial practice and statutory rules, affecting the interests of competitors. Bid-Rigging Cases The CPC is constantly monitoring public procurement procedures, latest caselaw revealing:
- a fine of BGN 55,770 (approx. EUR 27,885) on Total LC EOOD for a cartel for bid rigging of 22 public tenders between March 2020 and September 2021 on the markets for flowers and landscaping services.
- echnomat - Mercury EOOD, TPKI Zdravohod, and Cavalier Union 2001 EOOD being fined a total amount of BGN 2.75 million (approx. EUR 1,375,000) for a cartel for bid rigging of public tenders for work footwear between 2018–2022.
FSR Cases
The European Commission has conditionally approved the acquisition by Emirates Telecommunications Group Company PJSC ("e&") of PPF Telecom Group B.V.'s operations, excluding its Czech business, under the Foreign Subsidies Regulation (the "FSR"). PPF's telecom activities in Bulgaria, along with operations in Hungary, Serbia, and Slovakia, are part of the deal, serving over 10 million customers.
The Commission's investigation raised concerns about foreign subsidies received by e& from the UAE, including an unlimited state guarantee, which could distort competition in the EU internal market. To address this, e& committed to removing the state guarantee, restricting UAE's funding to EU operations, and notifying future acquisitions. An independent trustee will monitor compliance, ensuring fair competition. With these commitments, the Commission concluded that the transaction would not harm competition in the EU.
Furthermore, the EU Commission investigated a public procurement tender by Bulgaria's Ministry of Transport and Communications for 20 electric "push-pull" trains and related services valued at approximately EUR 610 million. The probe was triggered by a notification from CRRC Qingdao Sifang Locomotive, a subsidiary of the Chinese stateowned train manufacturer CRRC Corporation, which has reportedly benefited from foreign subsidies. The Commission will assess whether these subsidies allowed CRRC to offer an unduly advantageous bid, potentially harming fair competition.
What's Next in 2025?
The CPC has announced its priorities for 2025, which include cartels and bid rigging discovery and sanctioning, and the update of the Guidelines for the prevention of bid rigging, whereas the following have been described as priority sectors:
Energy – The CPC will continue to monitor the electricity and natural gas markets. In particular, the CPC will focus on direct or indirect price fixing, unfair commercial terms or discriminatory practices, including restricting of access to production or transmission capacities through unjustified refusals to supply.
Fuels – The CPC has highlighted recent changes affecting the market, i.e., the repeal of the derogation of Bulgaria for Russian oil, the existence of armed conflicts in Ukraine and the Middle East, and the potential exit of the market leader in Bulgaria and that as a result there may be changes expected to the structure of the market in Bulgaria.
Foods – During 2024 the CPC carefully analysed the sector and, in particular, the price formation processes at the retail level. It intends to continue this monitoring, in particular based on so-called "signalling" from the public.
Pharmaceuticals – The CPC intends to keep an eye on potential anticompetitive practices that may lead to imbalances in the supply process or distortion of competition between participants at individual levels of the distribution chain, and if necessary, will take actions to support the competitive process and contribute to the proper development of the market environment, including improving the conditions for the parallel import of medicines and facilitating market entry for and access to generic medicinal products, etc.
Digital economy and e-commerce – The CPC will form its sector analysis during 2025. The competition authority will continue its in-depth monitoring, including of gatekeepers, and will contribute to keeping digital markets open and competitive.
Sustainability – The CPC considers that antitrust legislation is a useful instrument for achieving an optimal balance between sustainability goals to maintain modern markets that support efficiency and innovations and encourage consumers' choice. In particular, greenwashing will be a focus of the authority.
Financial services – The CPC has highlighted the digitalisation of the financial market, including trends in fintech and the growing consumer trend for digital payments. The aim of monitoring this sector is to guarantee stability, transparency, and fairness.
Telecommunications – The competition authority noted that the sector is at the focus of several regulatory authorities, including for consumer and personal data protection. In addition, the CPC recognises that the high concentration of the market does not necessarily mean less effective competition.
Labour market – The CPC has explicitly mentioned the market practice for inclusion of non-compete and non-solicitation clauses in employment agreements. However, the competition authority has identified as a particular risk for competition infringements agreements between employers that agree on employee remunerations and non-compete/non-solicitation agreements.
Unfair competition priorities – The CPC will focus mainly on advertising practices, in particular, promotional campaigns and discounts, behaviour of buyers (including big supermarkets) on the food supply chain, as well as on e-commerce, in particular misleading advertisements and the prohibited provision of supplements. Moreover, the following two merger filings were announced in the last quarter of 2024 and are expected to be reviewed in 2025:
- the acquisition of United Health Insurance Fund Doverie ZAD, Bulgaria by Generali CEE Holding B.V., Netherlands, both active in the insurance sector; and
- the intention of EOS Invest EE GmbH (part of Otto Group) and the International Finance Corporation to establish a joint venture in Bulgaria, which is expected to engage in the acquisition of secured and unsecured portfolios of nonperforming loans and bank-owned real estate portfolios, as well as the provision of short- and medium-term bridge loans to corporate borrowers/SMEs.
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