Bulgarian Energy Holding EAD and Others v European Commission.

• Jurisdiction: European Union
• ECLI: ECLI:EU:T:2023:669
• Date: 25 October 2023
• Docket Number: T-136/19
• Celex Number: 62019TJ0136
• Court: General Court (European Union)

JUDGMENT OF THE GENERAL COURT (Fourth Chamber, Extended Composition)

25 October 2023 (*)

(Competition – Abuse of a dominant position – Internal market in natural gas – Decision finding an infringement of Article 102 TFEU – Regulated market – Definition of the relevant market – Romanian Transit Pipeline 1 – Holder of an exclusive right to use the Romanian Pipeline 1 – Refusal to grant access – Public supply obligation – State action defence – Transmission system operator – Storage system operator – Anticompetitive strategy – Exclusionary effects – Single and continuous infringement – Rights of the defence)

In Case T‑136/19,

Bulgarian Energy Holding EAD, established in Sofia (Bulgaria),

Bulgartransgaz EAD, established in Sofia,

Bulgargaz EAD, established in Sofia,

represented by M. Powell, A. Komninos, H. Gafsen and W. De Catelle, lawyers,

applicants,

supported by

Republic of Bulgaria, represented by L. Zaharieva and T. Mitova, acting as Agents,

intervener,

v

European Commission, represented by H. van Vliet, G. Meessen, J. Szczodrowski and C. Georgieva, acting as Agents,

defendant,

supported by

Overgas Inc., established in Sofia, represented by S. Cappellari and S. Gröss, lawyers,

intervener,

THE GENERAL COURT (Fourth Chamber, Extended Composition),

composed, at the time of the deliberations, of S. Gervasoni, President, L. Madise, P. Nihoul, R. Frendo (Rapporteur) and J. Martín y Pérez de Nanclares, Judges,

Registrar: I. Kurme, Administrator,

having regard to the written part of the procedure,

further to the hearing on 29 September 2022,

gives the following

Judgment (1)

…

I. Background to the dispute

2 BEH is a company wholly owned by the Bulgarian State. The Bulgarian State’s rights in BEH are exercised by the Bulgarian Minister for Energy. BEH has several subsidiaries which operate in the energy sector in Bulgaria. In the gas sector, it holds 100% of the capital of its subsidiaries Bulgargaz and Bulgartransgaz.

3 Bulgargaz is the public gas supplier in Bulgaria.

4 Bulgartransgaz is:

– the licensed gas transmission system operator (‘TSO’) in Bulgaria; on that basis, it operates the Bulgarian gas transmission network (‘the transmission network’) and the Bulgarian transit pipeline;

– the storage system operator (‘SSO’) of the only natural gas storage facility of that country, situated underground in Chiren (‘the Chiren storage facility’).

A. Factual background

…

1. Gas supply in Bulgaria

6 During the infringement period, there were two sources of gas supply in Bulgaria, namely domestic production and imports from Russia. Since domestic production was negligible at that time, the country’s supply depended almost entirely on imports of Russian gas.

7 The Russian gas was transported to Bulgaria via Ukraine, and then Romania, through three pipelines, namely the Romanian Transit Pipelines 1, 2 and 3, managed by Transgaz SA, the gas transmission system operator in Romania.

8 The Romanian Transit Pipeline 1 (‘the Romanian Pipeline 1’) crossed Romania from the entry point at Gas Metering Station Isaccea 1, situated on the Ukrainian-Romanian border, up to the Negru Vodă 1 entry point of the transmission network, situated on the Romanian-Bulgarian border. The transmission network, which in turn was connected to the Chiren storage facility, was a purely national network to which the majority of customers and local distribution networks in Bulgaria were connected, with the exception of customers and distribution networks situated in the south-west of Bulgaria.

9 The Romanian Transit Pipelines 2 and 3 transported the Russian gas from the Ukrainian-Romanian border to the Romanian-Bulgarian border at the Negru Vodă 2 and 3 entry points, and merged on Bulgarian territory, forming the Bulgarian transit pipeline. That pipeline was used for limited supplies in the south-west of Bulgaria and mainly transported gas to the former Yugoslav Republic of Macedonia, Greece and Türkiye.

10 Accordingly, at least until April 2016, the Romanian Pipeline 1 was the only viable option for transporting gas to Bulgaria with the aim of supplying most parts of the country.

11 The Romanian Pipeline 1, which has a total annual capacity of 7.4 billion cubic metres, was built in 1974 in accordance with the intergovernmental agreement concluded between the People’s Republic of Bulgaria and the Socialist Republic of Romania on 29 November 1970 (‘the 1970 Intergovernmental Agreement’).

12 On 5 July 1974, Bulgargaz’s predecessor, the company Neftochim, concluded an agreement with the company Rompetrol, Transgaz’s predecessor, for the use of the Romanian Pipeline 1. That agreement remained in force until 2005.

13 On 18 February 2003, the Republic of Bulgaria and Romania concluded a new intergovernmental agreement (‘the 2003 Intergovernmental Agreement’). Under Article 3 of that agreement, the contracting parties committed to requiring their respective gas operators, namely Bulgargaz and Transgaz, to enter into a new contract for the use of the Romanian Pipeline 1 in order to reflect the new transit tariffs.

14 Thus, on 19 October 2005, Transgaz and Bulgargaz concluded a new agreement (‘the 2005 Agreement’), under which Bulgargaz was granted exclusive use of the Romanian Pipeline 1 until 31 December 2011. That contract essentially guaranteed a capacity of 6.49 billion cubic metres per year. In return, Bulgargaz paid Transgaz a fixed annual fee, irrespective of the capacity actually used. In 2009, that agreement was extended until 31 December 2016.

2. Gas supply in Bulgaria

15 During the infringement period, Bulgargaz purchased gas from Russia and was the sole or the main importer of Russian gas to Bulgaria. It had also acquired the majority of domestic gas production. Bulgargaz was thus the main gas supplier, on the one hand, as regards upstream wholesale trade and, on the other hand, as regards final customers, namely the companies directly connected to the transmission network.

16 During the infringement period, Bulgargaz operated as a public gas supplier on the Bulgarian markets under licence No JI-214-14/29.11.2006 for the public supply of gas in the territory of the Republic of Bulgaria (‘Bulgargaz’s licence’). That licence had been awarded to it by Decision No P-046 of the Komisia za energiyno i vodno regulirane (Energy and Water Regulatory Commission, Bulgaria; ‘the Bulgarian regulator’) of 29 November 2006 (‘the decision of the Bulgarian regulator’), on the basis of the ЗАКОН ЗА ЕНЕРГЕТИКАТА (Law on Energy) of 9 December 2003 (DV No 107 of 9 December 2003), which was most recently amended on 13 December 2018 (DV No 103 of 13 December 2018) (‘the Bulgarian Law on Energy’) for a term of 35 years (Article 2.6.1 of that licence).

…

4. The Chiren storage facility

21 Natural gas can be stored for later use in underground gas storage facilities. Those facilities can serve as a tool to adjust supply according to demand, mainly in view of the seasonal variations in demand for gas. In addition, especially when there is a high dependence on a single source of supply, those facilities may provide important back-up possibilities in case of disruption of supply.

22 In Bulgaria, the Chiren storage facility, which has a capacity of 0.5 billion cubic metres, was the only existing storage facility during the infringement period. It was not a multicycle storage facility, since gas could only be injected into it during the ‘summer’ months and withdrawn during the ‘winter’ months.

…

C. Contested decision

34 In the contested decision, the Commission concluded, in essence, that the applicants had committed a single and continuous infringement of Article 102 TFEU between 30 July 2010 and 1 January 2015 (see recital 653).

…

II. Forms of order sought

56 The applicants, supported by the Republic of Bulgaria, claim, in the final form of order sought, that the Court should:

– adopt a measure of organisation of procedure or a measure of inquiry, ordering the Commission to produce the statement of objections in Case AT.39816 – Upstream gas supplies in Central and Eastern Europe (‘the Gazprom case’), and the related documents in so far as they concern the Bulgarian gas market;

– annul the contested decision in whole or in part, in so far as it concerns them or one of them;

– failing that, annul or reduce the fine imposed on them;

– order the Commission to pay the costs.

57 The Commission, supported by Overgas, contends that the Court should:

– dismiss the action;

– order the applicants to pay the costs.

III. Law

58 The applicants put forward seven pleas in law, alleging, respectively:

– first, infringement of their rights of defence, the principle of good administration and the principle of transparency;

– second, a failure to state reasons and errors of law and of fact concerning the definition of the market for capacity services on Romanian Pipeline 1;

– third, an incorrect finding that the applicants held a dominant position on the relevant markets;

– fourth, an incorrect finding that they abused a dominant position;

– fifth, an incorrect assessment of the duration of the alleged infringement;

– sixth, that they were deprived of the possibility of terminating the case by means of commitments, in accordance with Article 9 of Regulation No 1/2003;

– seventh, that there were errors in the calculation of the amount of the fine.

…

A. The second plea in law, alleging a failure to state reasons and errors of law and of fact concerning the definition of the market for capacity services on the Romanian Pipeline 1

…

3. The third part, alleging errors of law and errors in the assessment of the facts in the definition of the market for capacity services on the Romanian Pipeline 1

79 The applicants, supported by the Republic of Bulgaria, submit that the definition of the market for capacity services on the Romanian Pipeline 1 is vitiated by:

– an error of law, in that the Commission failed to distinguish between the primary and secondary capacity...