On October 25, 2023, the General Court delivered its judgment in Bulgarian Energy Holding and Others v. Commission. In a shift in the case law that signals an increased focus on effects in Article 102 cases, the General Court concluded that the Commission failed to establish that the examined conduct constituted a refusal to supply, let alone an abuse of dominance by Bulgarian Energy Holding, Bulgartransgaz, and Bulgargaz (together, “the BEH Group”). The judgment clarifies the evidentiary standard required to establish causality between purportedly abusive practices and their resulting potential anticompetitive effects. It also concludes that the Commission infringed the BEH Group’s rights of defense during the administrative procedure. The judgment signals the General Court’s willingness to scrutinize technical factual assessments that are often heavily contested by companies in competition law investigations.
In 2018, the Commission imposed a €77 million fine on the BEH Group for having abused its dominant position through practices that were deemed to foreclose potential entrants to the Bulgarian gas supply market by obstructing potential entrants’ access to crucial infrastructure. Specifically, the BEH Group refused to grant third parties access to the following infrastructure operated by Bulgartransgaz: (i) Romanian Pipeline 1, which is the only viable import pipeline bringing gas through Romania into Bulgaria; (ii) the domestic Bulgarian transmission network; and (iii) the only gas storage facility in Bulgaria. The Commission found that the conduct constituted a single and continuous infringement, which lasted from July 30, 2010 to January 1, 2015.
During the infringement period, the supply of gas in Bulgaria depended on imports of Russian gas through the Romanian Pipeline 1, which was managed by Transgaz, the Romanian TSO. Under an agreement between Transgaz and Bulgargaz concluded in 2005, Bulgargaz was granted exclusive use of Romanian Pipeline 1 throughout the infringement period, in return for a fixed annual fee. According to the Commission, Bulgargaz hoarded capacity on the only viable import pipeline so that potential rivals could not import gas into Bulgaria.
The BEH Group appealed the decision, claiming, among other things, that the Commission had failed to establish a refusal to provide access to the infrastructure in question, let alone an overarching anticompetitive strategy by the BEH Group. Siding with the applicants, the General Court found that the Commission had failed to establish that the BEH Group’s conduct was capable of restricting competition on the Bulgarian gas supply markets and, in particular, of producing exclusionary effects that were not purely hypothetical.
First, the General Court found that the BEH Group did not abuse its dominant position on Romanian Pipeline 1 by means of a refusal to supply. Second, the General Court found that BEH’s conduct in renegotiating capacity on Romanian Pipeline 1 was exempt from Article 102. Third, the General Court found that the BEH Group’s restrictive modus operandi, which temporarily hindered rivals’ access to gas infrastructure, was incapable of restricting competition. Finally, the General Court found that the Commission infringed the BEH Group’s rights of defense by failing to provide access to all potentially relevant information during the administrative procedure.
The judgment places a significant evidentiary burden on the Commission to demonstrate the precise sequence of events leading to actual foreclosure of rivals.
Refusal to supply. The General Court accepted that Romanian Pipeline 1 was an essential facility under the Bronner criteria, as it was the only viable route for transporting gas into Bulgaria during the infringement period. The General Court also rejected the BEH Group’s argument that it could not be liable for a refusal to supply as it did not own the facility. The judgment thus clarifies that ownership of the essential facility is not required for a refusal to supply to arise; rather, a “situation of control” is sufficient to invoke the essential facilities doctrine. Even though Bulgargaz was not the owner of the pipeline, it was in a “situation of control” as it benefited from exclusive use of the pipeline under the 2005 agreement with the Romanian TSO. Consequently, the General Court upheld the Commission’s finding of dominance.
However, the General Court rejected the Commission’s finding of an abuse. The General Court emphasized that the Commission bears the burden of proving that a refusal of access is capable of producing exclusionary effects that are not purely hypothetical. This requires proof that the requesting party is an actual or potential competitor with a “sufficiently advanced project to enter the market.” To ensure respect for the principle of freedom of contract, the request for access must also be “sufficiently precise” for the dominant firm to be able to assess whether it is required to respond to avoid a finding of an abusive refusal. “Purely exploratory” questions do not amount to a request for access, and dominant firms are not required to respond to them.
The judgment clarifies further points relevant to proving an abusive refusal to supply. First, the existence of Bulgargaz’s exclusive right to use the pipeline cannot itself constitute an abuse. Second, it is for the Commission to establish that the conduct in question is actually capable of foreclosing (potential) competitors. Third, Bulgargaz could not be criticized for “refusing access” by not replying to requests for access that were never sent to it: if there is no request for access, there can be no refusal to supply. Fourth, to the extent that access is actually requested, the dominant firm must respond within a reasonable period of time and may impose reasonable conditions for providing access. On the facts, the Commission failed to establish that Bulgargaz’s conduct amounted to a de facto refusal to supply, e.g., as a result of unduly delaying or hampering rivals’ access.
Causation and attributability. The General Court also emphasized that not all restrictive actions constitute restrictions of competition under Article 102 TFEU. The General Court concluded that the BEH Group’s modus operandi of hindering rivals’ access to the transmission network and storage facility during a certain period did not restrict competition. This is because rivals lacked access to the only pipeline available to import gas into Bulgaria to begin with, “for reasons which are not attributable to proven abusive conduct.” In other words, the General Court concluded that there was no restriction of competition because absent the BEH Group’s conduct, third parties would not have been able to compete anyway.
This line of reasoning appears to endorse a counterfactual assessment: restrictive conduct can escape Article 102 TFEU if it is not capable of producing anticompetitive effects on the market compared to the counterfactual scenario without that conduct. This position contrasts with the Commission’s stance that “abusive conduct does not need to be successful, i.e., to have actual anticompetitive effects” to be unlawful. The rule still remains that establishing an abuse requires that the conduct is “capable of restricting competition,” taking into account all relevant facts and circumstances. This final element now seems to include a counterfactual assessment of the market competition that would exist absent the conduct.
The General Court also focused on the BEH Group’s public service obligations aimed at ensuring the security of gas supply in Bulgaria, finding that it was legitimate and reasonable for the BEH Group to take measures to guarantee a minimum capacity reflecting its needs as the only public gas supplier in Bulgaria. Accordingly, the General Court applied the “state action defense” to exempt the BEH Group from liability for its conduct, including the imposition of conditions and safeguards, in the context of renegotiating its right to (exclusive) use of capacity on the Romanian pipeline.
Single and continuous infringement. The General Court annulled the Commission’s finding of an abuse in its entirety, despite upholding the Commission’s finding of an isolated instance of exclusionary conduct during part of the infringement period. According to the General Court, that instance of anticompetitive conduct could not, on its own, substantiate the alleged abuse, having regard to the factual and legal deficiencies in other aspects of the alleged infringement. This is because the Commission’s decision defined a single and continuous infringement “based on the complementarity and interdependence of [all]… forms of [alleged] conduct,” instead of separate forms of self-standing abusive conduct.
Procedural defects. The General Court found that the Commission infringed the BEH Group’s rights of defense by failing to provide BEH with sufficient access to the file covering all potentially inculpatory and exculpatory evidence, including information which “clearly has a bearing on the starting date of the alleged abuse, […], the duration of the infringement and, therefore, the level of the fine.”
This judgment brings welcome clarification of the evidentiary standard for establishing an abusive refusal to supply under Article 102 TFEU. In particular, it provides helpful guidance on the causation test for establishing exclusionary effects that are “not purely hypothetical.” While the judgment is fact-heavy and contextually nuanced, the principles it sets forth are likely to have a far-reaching impact on the future of competition law enforcement and practice. For one, the judgment signals the General Court’s increasing willingness to engage closely with the facts and scrutinize the Commission’s technical factual assessment. It remains to be seen whether, and to what extent, the Court of Justice will follow this judgment when reviewing pending appeals from the General Court that may have been less demanding on the Commission’s need to establish the causality between practices and anticompetitive effects in Article 102 cases.
 Bulgarian Energy Holding and Others v. Commission (“BEH v. Commission”) (Case T-136/19) EU:T:2023:669.
 Bulgarian Energy Holding (“BEH”) is a state-owned entity active at all levels of the energy supply chain in Bulgaria. The Commission decision also addresses two of BEH’s subsidiaries: (i) Bulgartransgaz–the only licensed gas Transmission System Operator (“TSO”) in Bulgaria; and (ii) Bulgargaz–the main supplier of gas at the downstream wholesale level in Bulgaria (together “the BEH Group”).
 BEH Gas (Case COMP/AT.39849), Commission decision of December 17, 2018.
 Bronner (Case C-7/97) EU:C:1998:569. Under Bronner, a refusal to supply by a dominant undertaking constitutes an infringement of Article 102 TFEU if the following three cumulative conditions are met: (i) refusal of the service is likely to eliminate all competition on the part of the party requesting the service in a neighboring market; (ii) the service in question is indispensable for carrying on that party’s business, as there is no actual or potential substitute for that service; and (iii) that refusal cannot be objectively justified.
 BEH v. Commission, paras. 261–263 and 268.
 Ibid., para. 287.
 Ibid., para. 281.
 Ibid., para. 282.
 Ibid., paras. 949–950, 953, and 1089–1100.
 Ibid., para. 951.
 Ibid., paras. 953–954.
 Commission Policy Brief 1/2023, “A dynamic and workable effects-based approach to abuse of dominance,” March 2023, p. 4.
 BEH v. Commission, paras. 571–572.
 Ibid., paras. 548, 572, and 616. The “state action defence” excludes from the scope of Article 102 TFEU conduct required by: (i) national legislation; (ii) a legal framework created by that legislation; or (iii) irresistible pressure imposed by the national authorities.
 Ibid., para. 1114.