Long term gas supply contracts – prohibition decision

The German competition authority (Bundeskartellamt) has prohibited the following gas supply contracts of E.ON Ruhrgas with its distributors:

• already existing contracts which run over a long-term period (at least until 2020) and cover more than 80% of actual gas requirements

• the conclusion of contracts with a contract period of over 4 years and cover more than 50% of actual gas requirements; and

• the conclusion of contracts with a contract period of over 2 years and cover more than 80% of actual gas requirements.

The contracts have been prohibited because the German competition authority believes the contracts breach EU and German competition law by foreclosing the gas distribution market. This in turn has meant higher prices by preventing market entry. The foreclosure effect is in large part due to E.ON Ruhrgas being "by far the largest gas supply in Germany".