ZID of the Law on the Protection of Competition No. 454-01-36, submitted by Mihail Mikov and a group of people's representatives

Ex. No. 451-00-452

MR PETER KANEV

CHAIRMAN OF THE COMMISSION

ON ECONOMIC POLICY AND TOURISM

TO THE 43RD NATIONAL ASSEMBLY

 

ABOUT: the introduced bill to amend and supplement the Law on the Protection of

competition, No. 454-01-36, submitted by Mikhail Mikov and a group of people

the representatives

 

DEAR MR KANEV,

 

In connection with the upcoming discussion of the bill to amend and supplement the Law on the Protection of Competition, No. 454-01-36 submitted to the National Assembly, submitted by Mihail Mikov and a group of people's representatives, the Confederation of Employers and Industrialists in Bulgaria expresses the following opinion:

On November 6, 2014, a group of people's representatives submitted to the National Assembly a Draft Law on Amendments and Supplements to the Law on Protection of Competition (the Draft Law). The same bill with the same reasons was introduced on March 7, 2014 by another group of people's representatives in the previous National Assembly. In their reasons, they state that the Law on the Protection of Competition (CLA) aims to ensure the protection of competition and create conditions for its expansion, and the draft amendment "aims to complement the existing provisions in order to create conditions for the implementation of a consistent policy for the protection of national markets, the production, delivery and distribution of goods and services by ensuring conditions of equal treatment in conducting negotiations in the implementation of commercial transactions and to prevent unfair commercial practices".

 

The predominant part of the reasons are texts taken from the Green Paper on Unfair Practices in the Food and Non-Food Supply Chain produced by the European Commission (EC) in early 2013, including texts listing the specific unfair practices in the EU. The proponents of the project indicate that the unfair practices in question "are operating with full force in our market as well, having an extremely negative impact both between the supplier and the buyer, as well as on the end user". They explain that the bill introduces the concept of "significant market power". However, the written definition differs significantly from the definition contained in the draft itself.

 

The reasons do not mention the essential regulations in the Food Law provided for in the transitional and final provisions of the Bill.

According to the importers, "the changes not only do not contradict the European legislation, but are in sync with the regulations of unfair trade practices in other European countries".

The importers undertake that with the final version of the project, a "financial justification for the effect of its adoption" will be prepared.

This opinion aims to present the expected effects of the Bill as a whole, as well as separately from the main texts in it.

Generalization

 

1. The bill is not accompanied by an impact assessment analyzing the benefits and costs of the proposed regulations for retailers, manufacturers and consumers.

2. Competition legislation in Bulgaria is still among the strictest in the EU. The stricter regulations in the Bill will further reduce the competitiveness of Bulgarian companies.

3. In Bulgaria, market concentration in FMCG retailing is low – the lowest among EU countries – and competition is strong and additional regulations are unwarranted.

4. The over-regulations in the Bill will restrict competition rather than protect it.

5. The proposed changes will worsen the business environment by increasing administrative burdens and investment risks through gross state interference with freedom of contract.

6. The bill shifts the focus from the real problems of the Bulgarian manufacturer that cause tension on the supply chain and reduce its competitiveness, such as energy prices, interest, subsidies, gray sector and bureaucracy, to non-existent or minor problems that can be solved painlessly with self-regulations .

7. The bill is communicated as regulating FMCG retail chains, but in practice the regulation will affect companies from all sectors of the economy.

8. The increase in administrative costs, new risks of huge fines and government intervention in pricing will raise food prices, which is also confirmed by the experience of other EU countries. This will reduce the well-being of consumers, and the most affected will be the socially weak Bulgarians.

9. The bill discriminates against large companies against small ones and traders against their suppliers and other businesses. Thus, in practice, the bill discriminates against foreign investors, especially international trade chains.

10. The over-regulations will stimulate imports at the expense of the sales of the Bulgarian suppliers, as well as negotiation of the trade chains with the large producers at the expense of the smaller ones. And supplier consolidation will reduce assortment, which will hurt consumers by limiting their choices.

11. The bill bans successful business models in modern commerce that are allowed in Western Europe. The Bulgarian state risks criminal proceedings against her by the European Commission for violating the freedom of establishment.

12. The European Parliament, the European Commission and the Council of the EU support and promote the EU Self-Regulation Initiative (Supply Chain Initiative), based on 10 principles of good Turkish practices, as a solution against unfair practices.

13. The World Bank in its public report, based on an in-depth analysis of possible solutions against unfair commercial practices in Bulgaria, concluded that the Bill is harmful and the solution should not be sought in the competition, but in the commercial legislation.

 

Main weaknesses and effects of the Bill

 

• The bill is not accompanied by an impact assessment. Such an assessment should contain an analysis of the benefits and costs for the parties concerned, in this case – traders, producers and consumers. It is not clear what the proponents of the Bill have in mind when they undertake to prepare a "financial justification for the effect of its adoption".
• The bill does not take into account initiatives at the EU level in relation to possible regulation of the food supply chain. The main European institutions support the initiative for self-regulation (Supply Chain Initiative), based on 10 principles for good commercial practices, to which 22 Bulgarian companies have already joined, three of which are commercial chains (and two other chains are in the process of registration) . If self-regulation fails, or if the EC's analyzes show that additional measures are needed, a legislative decision at EU level is expected. In this regard, the adoption of the Bill could turn out to be hasty and to a large extent damaging to businesses and consumers.
• Recent research by Noerr has found that similar regulations in the Czech Republic, Poland and Slovakia have been adopted in violation of European law and in particular in violation of freedom of establishment.
• The experience of a number of European countries (such as France, the Czech Republic, Poland and Slovakia) shows that the introduction of such restrictions leads to negative effects for the market and consumers. For example, in 1996 the "Galand law" in France, which intervened in pricing between large retail chains and their suppliers, interrupted a long-term decline in real food prices and caused a significant increase in prices. At the same time, real prices in Germany are falling. Similar effects in Bulgaria would be borne the hardest by the socially most vulnerable (socially weak, unemployed, pensioners, etc.). Even in France, they realize the harm of the law, which leads to numerous amendments and additions. The same is happening with the more recent regulations in the Czech Republic, Poland and Slovakia, which proves their failure.
• The proposed regulations will increase the administrative costs of commercial chains and the costs of adapting their business models to the new conditions, including for lawyers, for changes in information systems, for changing internal procedures and the organization of work. This will increase the cost of the commercial service, which will cause an increase in the margins between the purchase and sale price and will be transferred to the prices of the goods paid by the end user.
• The increased risks to traders associated with the high penalties set out in the Bill will raise investors' expectations of profits, leading to higher margins, and hence to an even sharper rise in commodity prices.
• The proposed regulation will significantly worsen the investment and business climate in the country. This increases the risk that foreign companies will continue to leave the country (there are already quite a few, the latest of which is Belgium's Delhaize, whose turnover in the EU is equal to half of Bulgaria's GDP), which will worsen the competitive environment and allow traders to raise their margins .
• The limited flexibility for general terms and conditions and standard contracts also comes at a cost, as some suppliers would probably not approve of them and contracts with these suppliers would not be concluded.
• By "ensuring conditions of equal footing when conducting negotiations in the realization of commercial transactions", the draft law actually aims at large retail chains paying a higher price for the goods of the suppliers. While maintaining the traders' margins, this would be reflected in a higher price of the goods for the consumers.

Example: Let's assume that a given product is BGN 10 in the supplier's price list. The merchant wants fees, bonuses and any other remunerations totaling, for example, 40%, which is BGN 4, that is, the product was actually taken from the merchant for BGN 6. Let's assume that the merchant's margin is 20%, which at a price of BGN 6 . is BGN 1.20, so the price for the end user becomes BGN 7.20.

Let us now assume that the new regulation achieve its goal, and due to the prohibition of various commercial services and the limitation of the amount of fees, the discount drops to 20%. Then the trader takes the product in question from the supplier for BGN 8 (which means that the supplier receives BGN 2 more, which is also the goal of the project). On top of this price, the trader puts the same margin of 20% and the final price of the product for the consumer becomes BGN 9.60 - BGN 2.40 more than the price before the new regulations.

But the higher costs and greater risk resulting from regulations would also increase the trader's margin. If, for example, the merchant raises his margin to 25%, the final price of the product becomes BGN 10. In this example, the price of the product goes up by nearly 39%.

Supporters of the Bill say – if we remove the many fees, bonuses and discounts, the price will logically fall. But this argument does not take into account the fact that a large part of these "rewards" for the merchant, as can be seen from the above example, are actually reflected in a reduction of the final price of the product for the consumer. In other words, the merchant does not take all of these "fees" but charges his margin on the actual price he pays for the product. In the example, the merchant receives BGN 1.20, not BGN 4. The remaining BGN 2.80 is a price reduction for consumers.

• The proposed restrictions are in clear contradiction with one of the main principles enshrined in the Constitution, namely that of free economic initiative (Article 19 of the Constitution). In violation of the Constitution, the investments and business activities of Bulgarian and foreign citizens and legal entities are not only not protected by the law, but on the contrary - they are limited.
• The proposed restrictions are contrary to European law and the basic principles of functioning of the internal market. The introduction of protectionist measures aimed at eliminating or restricting normal market mechanisms in this market by giving an advantage unjustified for objective reasons to certain market participants would be in conflict with the principles of freedom of establishment, free movement of goods and freedom to provide services , enshrined in the Treaty on the Functioning of the EU. It would also run counter to the main purpose of the single European internal market, as instead of removing barriers to trade and facilitating it, regulation would create barriers to that trade and selectively harm businesses with higher investment.
• In its resolution of December 2013, the European Parliament (EP) specifically warned member states that "they should refrain from discriminatory measures, such as trade laws [...] which only affect certain sectors or business models and distort competition." the same resolution the EP "deplores the fact that some Member States discriminate against foreign companies by creating new barriers that make it difficult for them to establish themselves in a given Member State, as this constitutes a clear violation of the principles of the internal market". The EP "calls on the Commission and the Member States to give the highest political priority to the retail sector as a pillar of the single market,[…] and to remove the regulatory, administrative and practical obstacles that hinder the establishment, development and continuity of businesses and make it difficult for retailers to benefit entirely from the internal market". And calls on the EC "to pursue a policy of zero tolerance towards Member States that do not properly apply the rules of the internal market, [...] through proceedings to establish non-fulfilment of obligations and to speed up these procedures through fast-track proceedings".
• Even the July 11, 2013 report of the European Economic and Social Committee, an advisory body to the European Parliament that is often cited by supporters of the Bill as pushing for regulations on unfair trading practices, acknowledges that it will raise prices of food and national regulations are rejected ("for various reasons the results of these laws are unsatisfactory"; "some restrictions [on free movement] may appear") and it is stated that the challenges must be solved at the level of European legislation.

 

The main weaknesses of the Bill are also confirmed by the World Bank, which, based on its in-depth analysis, published a report "Responding to Unfair Trade Practices in Bulgaria", in which it criticized the Bill. According to the bank:

• The choice to target measures in response to unfair commercial practices within the framework of competition policy is not obvious and is associated with certain risks;
• Arguments in favor of a competition policy solution are difficult to support.
• The introduction of "significant market power" in response to UTPs is likely to lead to significant market uncertainty.
• The concept of significant market power as applied through the competition policy framework raises some difficult conceptual and empirical questions.
• The bill could politicize the work of the CPC, discredit its reputation as an impartial body and overburden it.
• Implications for consumer welfare are not clear.
• The intended measures may be harmful.
• The probability of false positive results increases.
• The experience of other countries using a similar approach shows that it has caused repeated amendments.
• Addressing UTPs through the UTP framework leaves uncertainty as to what legal tools will be available to the Bulgarian authorities and in line with EU competition directives.
• The use of commercial courts to deal with unfair commercial practices is the most applicable and effective option for Bulgaria.

 

Significant market power:

 

1. Proposed changes:

The Bill introduces a new form of competition violation – abuse of significant market power – in addition to the previously settled prohibited agreements, decisions and concerted practices, abuse of monopoly and dominant position, and unfair competition.

The draft law defines significant market power as follows: "Significant market power is possessed by an enterprise that is not in a dominant position, but in view of its market share, financial resources, market access opportunities, technological level and economic relations with other enterprises can impede competition in the relevant market because its suppliers or buyers are dependent on it'. The proposed definition is almost identical to the definition of a dominant position established in the Civil Code, with the only difference that the emphasis for an enterprise with a dominant position is its independence from competitors, suppliers or buyers, while for an enterprise with significant market power, the emphasis is on the dependence of its suppliers or buyers.

The draft law provides that the criteria for determining and evaluating the market position of enterprises with significant market power shall be determined in the methodology of the Commission for the Protection of Competition (CPC), and the deadline for the preparation and publication for public discussion of the changes in the methodology is 3 months from entry into effect of the amendments to the Civil Code.

For the first time, the draft law proposes the possibility to keep secret the identity of the person who initiated proceedings before the CPC for violation of the prohibitions on abuse of a monopoly, dominant position and significant market power, as well as for violation of the prohibitions on unfair competition, when the person is with affected/threatened interests and requested anonymity.

 

1. Opinion on the proposals:

• The main and most obvious shortcoming of the Bill is that it lacks a clear distinction between a dominant position and significant market power. Including in the reasons for the draft law, it is stated that the concept of significant market power is introduced for an enterprise that "enjoys a position equivalent to a dominant […]". In practice, the test for the existence of a dominant position would probably lose all practical meaning, as it would be sufficient for the CPC to demonstrate that an undertaking has significant market power to establish the existence of an infringement.
• In the legislations in which the abuse of significant market power (or, more correctly, with a "stronger bargaining position") is regulated, this regulation aims to regulate the bilateral relations between an enterprise and a specific counterparty, and not as overall position of the enterprise in relation to all other participants in the relevant market. In this context, the proposed changes to introduce the abuse of significant market power are completely unsuccessful from the point of view of the way of formulation and the place of the regulation in the CPA. Currently, Chapter Four of the CPA contains a regulation of antitrust rules (prohibited unilateral behavior) and supplementing it with rules relating to bilateral relations between individual market participants would be contrary to the concept and purpose of the law - protection of the competitive environment, not of individual market participants.

Moreover, as indicated in the final report of the 2008 Congress of the International Competition Network in Kyoto, most of the national competition authorities that responded for the purposes of the benchmarking considered that antitrust legislation should not be deals with individual arrangements reached in the course of commercial negotiations between individual economic entities, unless they restrict competitive relations and thus harm the welfare of consumers.

• Only an analysis of the individual relationship between a particular supplier and a particular trader can reveal the asymmetry in bargaining positions as a possible indication of abuse by exploiting a stronger position of one of the contracting parties.
• The proposed change applies to any "enterprise" within the meaning of the CPA and will therefore affect all business entities in Bulgaria that work with "suppliers or buyers". It is clear from the reasons for the draft law that the regulation is generally directed against the large sellers of fast moving goods. At the same time, however, changes are being proposed to the Civil Code, which is a general law. This approach will ultimately result in restrictive business regulation to all sectors of the economy.
• Delegating to the CPC the power to develop the specific criteria for distinguishing significant market power from a dominant position means that the CPC will concentrate both rulemaking and enforcement powers, which is in violation of the basic constitutional principle of separation of powers. The consequences of this would be unlimited rights for the administration and the danger of unjustified interference in market relations without a real possibility of control. Leaving aside the doubts about the availability of an adequate resource for the implementation of this task, such a broad delegation will not contribute to improving the transparency of the regulatory requirements for economic activity and the predictability of administrative interventions in the market.
• Blurring the definition of a dominant position with the vague concept of significant market power will weaken and render meaningless the regime of the so-called "block exemption", which has been in operation for several decades and was introduced at the initiative of the EC and widely applied by the CPC itself. The purpose of the "block exemption" is to introduce criteria for cases that will not be considered an infringement, using threshold levels of market share. The behavior of enterprises with a market share below the threshold is not examined because economic theory and law enforcement practice have proven that it cannot have a significant negative impact on competition. With the amendments proposed in the draft law, in practice, it could lead to the imposition of penalties on enterprises with an insignificant market share. Thus, conduct that should be exempt under the applicable rules of EU law may be classified as an infringement if the "market power" in the particular case exceeds the vague threshold set by the Bill. The result would be a devaluation of legal certainty to the detriment of competition.
• It is quite possible that conduct which at first glance appears to be an abuse of significant market power may be favorable to consumers. For example, downward pressure on delivery prices actually lowers final retail prices, which benefits consumers. Therefore, the existence of better market positions in itself should not be classified as an infringement, as long as it does not damage or endanger the interests of consumers.
• The settlement of the possibility that the complainants can ask that their identity not be revealed in practice means that anonymous complaints and reports are allowed, which is in direct contradiction to Art. 111, para. 4 APC ("Proceedings are not initiated based on anonymous suggestions or reports [...]"). At the same time, it is not even provided in the powers of the CPC to assess whether the request is justified, but it seems to be respected in all cases. Apart from the above, the "absence of a party" would practically make it impossible to implement the procedure, to conduct proof and the right of defense of the opposite party would be violated.
• At the same time, there are no changes to the sanction regime under the Civil Code, which means that the sanctions for abuse of significant market power will be the same as for abuse of a monopoly or dominant position - up to 10% of the total turnover of the enterprise for the previous financial year. Such an approach does not take into account the type and severity of the violation. Cartels, prohibited agreements, abuse of a monopoly and dominant position affect competition in the market as a whole, while the abuse of significant market power could only affect a specific market participant - the counterparty of the relevant enterprise. If the abuse of significant market power threatens effective competition at all, it would be too small for the penalties to be so high.
• Bulgaria is among the EU countries with the strictest competition law regulations. Not only will successive changes not make competition in the affected markets more effective, they risk restricting it. With regard specifically to the fast-moving goods market, the regulation of which is aimed at by the Draft Law, the need for regulation of this market is doubtful at all, considering how highly competitive it is. The concentration in trade of fast moving goods in Bulgaria is the lowest among the EU countries and several times lower compared to the countries of Western Europe, in most of which the five largest companies in the sector hold more than 70% of the market. In Bulgaria, the top 10 companies in the sector hold only 36% of the market, and the largest retail chain has less than 11% of the market. The share of all international companies in the sector (currently eight) is about 32%, and all modern trade, which includes the 50 leading retail chains, has 45% of the market. The remaining share is held by tens of thousands of small shops and markets.
• The immediate economic effect of the introduction of the abuse of significant market power will be a reorientation of market participants towards working with a smaller number of mostly large and established companies at the expense of small, innovative, start-up and not yet established producers, so as to minimize risks from a possible charge of abuse of significant market power.
• Another likely immediate consequence is an increase in imports stimulated by national overregulation. This, in turn, will limit market access for new goods and reduce the range of goods for consumers. In the end, it will mainly be the small and medium-sized enterprises, including manufacturers/suppliers, in whose "interest" the regulation is designed, as well as consumers again, that will be affected.
• If the proposed Bill aims to support certain producers, it may turn out that the problem is not correctly defined, and therefore the proposed approach is likely not to produce the intended results. For example, if certain Bulgarian producers are uncompetitive on the relevant market, do not reinvest their profits in new machines and technologies, do not expand their production, do not enter the European and international markets, it is unlikely that the new regulation will solve their economic problems and lead to an increase in their financial results. On the contrary, it may turn out that as a result of the restrictive regulation they will lose even the market presence they now have, as their counterparties will be forced to choose safer partnership options.

 

New regulation in Chapter V PPE (concentration control)

 

1. Proposed changes

The Bill includes a proposal to amend the text of Art. 26 of the CPC, which determines the conditions under which the CPC permits concentrations of economic activity. It introduces a requirement that the transaction be "conducted without opposition to the merging entity" and that it not result in the "establishment or strengthening of significant market power".

2. Opinion on the proposals:

Due to the lack of reasons for the individual proposals, it remains unclear what the exact rationale for this amendment is.

• The proposed wording regarding "opposition to a merging entity" is legal nonsense. According to Art. 22 (1) CPA, a concentration between undertakings is any permanent change in control which can be effected in a number of different ways. A merger is only one of the possible forms of corporate restructuring that can lead to concentration. Given the fact that the merger is one of the rare ways to establish control, in the text of Art. 26 of the Civil Code, conditions are set that simply cannot be applied in the majority of situations encountered in practice.

Separately, it should be pointed out that according to the rules of the Commercial Law (See Art. 262e in conjunction with Art. 262 a of the Commercial Code), the merger is carried out on the basis of a contract that must be approved by all participating companies in the conversion. According to the express rule of Art. 262h of the Civil Code, if the merging company does not approve (ie if it "opposes") the merger, the contract will not enter into force. In view of this, the proposed addition is completely pointless.

• The second hypothesis "establishment or strengthening of significant market power" is not only unmotivated, but also extremely harmful for the Bulgarian economy. Its application would allow the CPC to prohibit concentrations of economic activity entirely at its discretion, as the detailed criteria for "significant market power" are drawn up by the commission itself. This restriction does not derive from European law, with which the CPA is fully harmonized, and would lead to blocking the market of mergers and acquisitions in Bulgaria, calling into question transactions in all sectors of the economy. Such a restriction on investments seems completely irrelevant and disproportionate to the declared goal of the Bill - combating unfair trade practices. It is not clear what the real goal of the proposed new text is, but it is certain that it will not prevent unfair practices and will create additional administrative pressure and restrictions on transactions, driving away investors from Bulgarian enterprises.

General conditions and model contracts - approval and changes by the CPC and publication

 

1. Proposed changes:

The draft law creates an obligation for enterprises with a total annual turnover of over BGN 50 million for the previous year to present to the CPC "the drafts of standard contracts and/or general conditions for the supply of goods intended for sale", "as well as proposals for changes to them ” to assess their compliance with the provisions of the Civil Code. The assessment by the CPC is carried out according to the rules of the "competition advocacy" procedure.

 

After the approval of the standard contracts/general terms and conditions by the CPC, enterprises are obliged to publish and maintain them on their website, as well as to comply with them. The sanction in the case of not providing them for assessment by the CPC, of ​​not publishing them on the enterprise's website, of amending them without an assessment of compliance, or of violating approved contracts/general conditions is up to 1% of the average daily total turnover of the enterprise for the previous financial year for each day of the infringement.

 

The deadline for presenting the standard contracts/general conditions of the mentioned enterprises to the CPC is 3 months from the entry into force of the amendments to the CPC. And within a period of 2 months after the approval of the contracts/general terms and conditions by the CPC, the enterprises are obliged to propose "changes to their suppliers to bring the concluded contracts into line".

 

1. Opinion on the proposals:

• Without any connection to the proposed new regulation of abuse of significant market power, a second group of restrictions is introduced, but only for a precisely defined circle of market participants - enterprises that receive "periodic supply of goods intended for sale" (ie only buyers) and have a total annual turnover for the previous year of over BGN 50 million. The obligations of these enterprises to submit their model contract and/or general terms and conditions to the CPC for approval unreasonably discriminate against their competitors who do not meet the specified conditions, and place them in an unequal position vis-à-vis their counterparties (suppliers). For example, it does not take into account that it is possible for a supplier/manufacturer to have significant market power, rather than just a buyer.
• The bill affects practically all traders of goods and especially those with more significant investments (including not only traders of food, but also of equipment, fuels, cars, medicines, cosmetics, building materials, textiles, furniture, etc. .).
• There is no economic justification whatsoever why exactly these enterprises (with a total annual turnover of over BGN 50 million for the previous year) should submit a standard contract and/or general conditions to the CPC for evaluation, as well as in what way their behavior affects the competition of the market. The bill doesn't even require them to abuse significant market power. Apart from that, there is no economic analysis of the benefits and costs of the regulation, and whether it is justified to protect the interests of a narrow circle of market participants at the expense of drastically limiting the contractual rights and business freedom of a wide circle of traders with significant investments in the country.

Criteria using specific numerical expressions and values ​​have long been abandoned in European doctrine after the introduction of the "more economic approach" in competition law.

• The bill grossly interferes with the contractual freedom of parties to "periodic supply of goods" contracts by:

1. obliges buyers to use written contracts (in the form of standard contracts or general terms and conditions), regardless of whether the parties wish to do so or not;

2. obligates, in a discriminatory manner, certain buyers to present the standard contracts/general terms and conditions to the CPC for evaluation;

3. obligate such purchasers thereafter to apply these contracts/general terms and conditions, regardless of whether there is consent of both parties thereto and without regard to the fact that the supplier may in turn prefer its general terms and conditions to apply;

4. obligates the parties to such contracts to "harmonize" any amendments to it with the CPC, which means direct interference in their commercial relations not only at the level of principle, but also at the level of the negotiation process.

• The result of the regulation will be the replacement of market mechanisms of free negotiation by state regulation and the imposition of administratively approved sample contracts in private legal relations. It does not take into account what the will of the parties is, what their economic interests are, whether they wish to conclude a written contract at all, whether it meets the specific goals, how the conflict should be resolved, if the parties have previously worked under the general terms and conditions of the supplier. Such regulations are characteristic in principle for consumer relations, but not for trader relations, for which the Commercial Law presumes that more than due care is taken.
• Over-regulation of correct market participants, such as commercial chains (which work with written contracts, transparently), is being reached, and the same will be subject to control by both the CPC, the Bulgarian Food Safety Agency and the Regional Health Inspections. And the gray sector will remain outside the regulation. On the contrary, the proposed regulation will stimulate the gray economy, as it will motivate some economic agents not to "reach" the levels of turnover established in the PPE, in order not to be affected by the restrictions.
• The bill provides for the evaluation of contracts/general terms and conditions by the CPC to be carried out p