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ARTICLE · 10 MAY 2010

Commission Accepts Further Commitments In The Energy Sector

On 4 May 2010, the European Commission accepted binding commitments from E.ON under Article 9 of Regulation 1/2003 in what is the ninth antitrust decision to be made since the Commission's energy sector inquiry in 2007.

European UnionAntitrust/Competition Law
SJ Berwin'S EU & Competition Team
SJ Berwin'S EU & Competition Team

On 4 May 2010, the European Commission accepted binding commitments from E.ON under Article 9 of Regulation 1/2003 in what is the ninth antitrust decision to be made since the Commission's energy sector inquiry in 2007.

Following an investigation into the activities of E.ON and its subsidiaries, the Commission opened proceedings against E.ON amid concerns that it had abused its dominant position on the German markets for the supply of gas.

The Commission identified behaviour suggesting that E.ON might have infringed Article 102 TFEU. Evidence suggested that E.ON made long term bookings on large parts of its gas transmission system resulting in other gas suppliers potentially being prevented from accessing the infrastructure needed to supply gas to customers within EON's network - restricting competition on the downstream gas supply market and ultimately harming consumers.

Under the accepted commitments (which were market tested in January), E.ON undertakes to release by October 2010 large entry capacity volumes into its gas network, which corresponds to about 15% of the total pipeline capacity. E.ON further undertakes to reduce its overall share in the bookings of entry capacity in the H-gas market area to 50% and for the L-gas network to 64% from October 2015.

The commitments decision does not conclude on whether there has been an infringement of any competition rules; however it does legally bind E.ON and closes the Commission's investigation.

Although the remedy is not a structural one (as in other recent energy cases such as RWE's commitment to divest its gas transmission network) the Commission states that it is of a structural nature and will lead to a permanent change in the structure of the German gas transport markets.

This is the second time that E.ON has agreed commitments with the Commission. In November 2008, the Commission accepted binding commitments from E.ON to address concerns that it may have abused its dominant position in the German electricity wholesale market and German electricity balancing market. Under the commitments, E.ON agreed to divest about 5,000 MW of generation capacity from different types of technologies and fuels, as well as its transmission system business.

To view Community Week, Issue 470 – 7 May 2010 in full, Click here.

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