The CPC addressed a statement of objections to DP NKZI alleging the company has abused its dominant position, which can prevent, restrict or distort competition in the market for freight rail transport in the country and affect consumers’ interests

With Ruling № 67/19.01.2023 on case № KZK/109/2021, the Commission on protection of competition addressed a statement of objections to DP National railway infrastructure company (DP NKZI) for an infringement of art. 21 (3) of the Law on protection of competition and of art. 102 (c) of the Treaty on the functioning of the European Union consisting in an abuse of dominant position in the market for management of the railway infrastructure - public state property of the Republic of Bulgaria and in the market for traction electric energy distribution through the distribution networks of the railway transport of DP NKZI, which can prevent, restrict or distort competition in the market for freight rail transport in the country and affect consumers’ interests, by implementation of a strategy for differential treatment which places BDZ TP in a privileged position compared to the other rail freight carriers.

DP NKZI is established as a public undertaking on 01.01.2002 by the Rail transport Act and operates as a manager of the railway infrastructure and as a legal successor of the business and of the assets of the now defunct National Company BDZ.

The activities which give rise to the Commission’s statement of objections are related to the provision of access to licensed freight carriers to the railway infrastructure, which is entrusted to the NKZI for management, and more specifically for: levying charges for use of the infrastructure, scheduling train timetables, reserving and providing the railway infrastructure capacity for the purpose of carrying out transports and distribution of traction electricity through the distribution networks of the railway transport.The Commission established in the course of the investigation that DP NKZI holds a dominant position in the market for the activities related to the management of the railway infrastructure, which in turn bears the character of an essential facility for the operators of railway transport active on the territory of the country.

As regards the conduct that is subject to the Commission's competition concerns, for the period from 2010 until the ruling, NKZI applied an overall strategy to privilege BDZ TP, which is part of the same economic group. The alleged anti-competitive conduct consists of a series of practices that place BDZ TP's competitors in the freight market in an disadvantageous competitive position vis-à-vis BDZ TP itself. These practices consist of:

• Different conditions for access and use of the railway infrastructure and service facilities, by which, in practice, BDZ TP has the opportunity to save fees that other carriers pay when exercising their activities.

• Different conditions for distribution of electricity through the distribution networks of DP NKZI by application of different methodology for calculation of the traction electricity consumption. This makes it possible to consider that the amount charged to BDZ TP for a given consumption is hypothetically different that the amount charged to the other carriers for the same consumption.

• Different opportunities for the payment/ settlement of obligations for BDZ TP on the one hand and for the other railway carriers on the other.

The functioning of a competitive rail freight market is of increasing importance to consumers and businesses in Europe today because of its key role in building the green and sustainable economy of the future.

NKZI's strong market position requires it to provide non-discriminatory access to the infrastructure it manages to all licensed rail carriers which are highly economically dependent on it.

In the specific case, the considered anti-competitive behaviour of the dominant undertaking stems from the absolute necessity of carriers to use the railway infrastructure, as well as the electricity distribution network of NKZI for those, which use electric locomotives, without which the provision of their service is impossible.

Within a period of 60 (sixty) days, the parties to the proceedings have the right to submit written objections to, respectively opinions on, the statement of objections. This period shall begin from the date, the ruling is received.