As part of an ongoing investigation into alleged abuses of a dominant market position, this week the European Commission (the "Commission") invited comments from interested third parties on commitments offered by ENI SpA.
ENI is a multinational company in which the Italian government owns a golden share. It is Italy's largest industrial company; active in the markets for oil and gas, including production, supply and transportation.
The Commission became concerned about the management and operation of certain gas transmission pipelines by ENI and, following dawn raids on power companies across Europe in 2006, issued a Statement of Objections ("SO") against ENI. In its SO, the Commission alleged, as a preliminary assessment, that ENI had committed a breach of Article 102 of the TFEU. Although ENI does not accept the allegations in the SO, it has offered commitments to meet the Commission's concerns laid out in the SO.
Under Article 9 of Regulation 1/2003, where the Commission intends to adopt a decision requiring an infringement to be terminated, the undertakings concerned may offer commitments responding to the Commission's concerns. Such commitments are made legally binding by a "Commitment Decision" of the Commission, which states that there are no longer any grounds for actions by the Commission (and the undertaking in question is not found to have committed an infringement). However, before accepting any commitments, the Commission must invite comments from third parties for a period of one month pursuant to Article 27(4) of Regulation 1/2003.
The Commission's concerns focus on pipelines that deliver gas from Austria and Germany into and around Italy. The Commission accused ENI of abusing its dominant position through:
- strategic under-investment: capping investment on the international gas pipeline system to its advantage;
- capacity hoarding: refusing to allow usage of excess capacity within its transport network; and
- capacity degradation: offering capacity in a sub-optimal manner.
It is alleged that these policies may have adversely impacted upon potential and/or actual competitors seeking to supply gas to Italy.
ENI has now agreed to divest some of its gas transmission businesses in Austria, Germany and Switzerland. The result of these proposed divestments is that ENI will have reduced control over:
- the Trans Europa Naturgas Pipeline from Holland to Switzerland through Germany;
- the Transitgas pipeline system in Switzerland; and
- the TAG pipeline through Austria.
Until the divestments are complete, ENI will not prolong or renew any contracts relevant to them.
Similar commitments have recently been accepted by the Commission from E.ON, GDF Suez and RWE (relating to divestments in the gas and electricity sectors), so we can reasonably expect the Commission to accept those offered by ENI in this case. However, the Commission is bound to consider any objections raised by third parties, but whether any materialise remains to be seen. This appears to indicate a developing trend in the Commission's competition policy, whereby Article 102 TFEU investigations are closed by the parties offering commitments.
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