In November 2012 the Competition Protection Commission imposed the highest penalty in its history for prohibited agreements between the distributor of Hyundai in Bulgaria, Industrial Commerce OOD, and authorised Hyundai/Industrial Commerce dealers pursuant to Article 15 of the Competition Protection Act and Article 101 of the Treaty on the Functioning of the European Union.

The commission started its investigation in November 2011 based on the findings of its sector inquiry into competition in the market for the distribution of new motor vehicles, spare parts and repair services. The investigation was first opened against Industrial Commerce and one of its affiliates. In order to collect relevant evidence, the commission conducted a dawn raid using forensic tools on the offices of Industrial Commerce and its affiliate. On the basis of the evidence collected, the commission widened the investigation to include the dealers authorised by Industrial Commerce for the distribution of new Hyundai motor vehicles, spare parts and repair services.

In its decision the commission established that the agreements between Industrial Commerce and the authorised dealers contained, both in respect to distribution of new motor vehicles and spare parts, the following hardcore restrictions:

  • restriction of retail price maintenance provision; restriction of dealers within the selective distribution system to sell brands of competing suppliers;
  • restriction of the cross supplies between dealers in the selective distribution system; and
  • restriction of active sales to end users by dealers within the selective distribution system.

The commission concluded that that the restrictions harm competition in the national markets of distribution of new motor vehicles, spare parts and repair services. The commission imposed on Industrial Commerce a penalty of Lev15,988,300 (approximately €8 million) and significantly lower penalties on the dealers. The penalties were imposed at a maximum amount allowed by the act - 10% of the aggregate turnover of the respective undertakings for 2011.

Originally published on International Law Office

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