The Bulgarian state – an active fighter against capitalism

Yesterday it became clear that the Supreme Administrative Court confirmed the decision of the Commission for the Protection of Competition to impose a fine of 200,000 leva on the company Uber, as well as to prohibit it from practicing its activities in its current form. The decision was made on the basis of Art. 29 of the Law on the Protection of Competition. It states: "Any action or inaction in carrying out economic activity that is contrary to fair commercial practice and damages or may damage the interests of competitors is prohibited."

Reading and analyzing this text of the law, we see that according to the CPC, competition protection is achieved through… elimination of competition. Presumably, every business strives to maximize its profit. In a free market, this is done by offering a better service at a lower price than other competitors. Every business venture of a given player by default damages the “interests of competitors”, which is the fundamental meaning of competition. Through this absurd and evasive text, the state has given the CPC the opportunity, at its discretion, guided by the lobbying interests of certain players, to punish inconvenient competitors.

Is Uber to blame?

The classic justification for government regulation is that when a company does not comply with established rules and regulations, it is in a privileged position in the market and harms others. But who is actually harming whom?

The answer to this question is not complicated – the state harms everyone. First of all, the regulations introduced for the provision of transport services are completely unnecessary, they make it difficult for new players to enter and increase the price of the service that customers pay. Such requirements are the mandatory yellow color of vehicles, mandatory registered taximeters, mandatory GTP twice a year, etc. All these measures, supposedly in the name of the client, actually work against him, as they limit his choice of what service to use.

Uber's "sin" actually lies in finding loopholes in already harmful legislation and managing to provide innovative and quality service to customers. The company's actions are completely in line with the idea of a free market, but contradict the CPC's notion of "fair competition."

The formal interpretation of the law in this case is not so important. It is in the domain of lawyers to assess whether the company provides a taxi service according to state criteria or something else. The issue lies in the fact that, according to the authorities, something as simple as taxi services should be strictly regulated, operate according to certain non-market rules, and those who avoid complying with them should be severely punished. This policy can easily be attributed to classic fascism (strong state power and regulation of property).

How is the world?

Unfortunately, the case is not isolated only in our country. Uber is being brutally persecuted by state regulatory authorities all over the world. In supposedly civilized countries like France , there have been ugly scenes of vandalism and protests against the company – a picture that would be more appropriate for countries like Pakistan or Uganda than for one of the leading ones in the EU. Even in Hong Kong – a city famous for its free economy and attracting foreign investment, drivers of the company have been arrested by the police. Similar measures have been taken in Brazil, the USA and other countries.

These examples show that things are not particularly good on a global scale either. State regulatory authorities are trying their best to limit competition and market freedom, driven by the lobbying interests of traditional taxi companies. The global experience in this case should not be taken as a positive (as is often the case with the argument "that's how it is around the world"), but as a negative example.

Moreover, Bulgaria had a unique chance to emerge as a free market economy and attract foreign investment from Uber. This would lead to economic growth, job creation, and an overall improvement in the quality and prices of taxi services.

Unfortunately, the Bulgarian state has once again shown itself to be an active fighter against capitalism and has raised some troubling questions. How powerful is the “antimonopoly” body, the Competition Commission, and is it really antimonopoly or the opposite? What signal do we give to potential foreign investors when we condemn a company for offering a better service? Under Art. 29 of the Competition Act, doesn’t every company become a potential criminal if its competitors feel their interests are harmed? Is the market economy in Bulgaria really a market economy or is it mainly a competition for the favor of the state and its use to stifle competitors?

In the context of this situation, we can also recall a recent case study – the one with fuel. After the emergence of a new competitor in the taxi industry caused such a negative response and such decisive anti-market actions by the authorities, what would happen if an investor wanted to import and sell fuel at competitive prices and how would the CPC react to this? For now, we will not receive an answer to this question.

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