Commission announces a settlement of a case against EDF,
alleged to have abused a dominant position by concluding long-term electricity
contracts with industrial customers and prohibiting the resale of electricity
In July 2007 the Commission opened proceedings
against EDF, alleging that it had abused its dominant position by:
- concluding long-term de jure or de facto
exclusive supply contacts with industrial customers. EDF was considered to be
dominant on that market (see below), with a quasi-monopoly on production,
supply, transmission and distribution to large industrial clients, as well as
the existence of important entry barriers and EDF's commercial advantages. In
these circumstances, this practice clearly significantly limited the possibility
for other companies to conclude supply contacts with such customers.
- including in supply contracts clauses preventing
industrial customers to resell purchased electricity.
Under the procedure foreseen under Article 102 of
the Lisbon Treaty the Commission can close a case where it has in principle
established the existence of an infringement of the anti-trust rules where the
company or companies in question provide undertakings that are adequate and
proportionate and a public consultation in this respect has been made. In such
circumstances the Commission adopts a decision closing the case, but making the
commitments legally binding.
EDF proposed undertakings as follows:
- During a 10 year period it will ensure that an
average of 65% of the volume of its contracts with large industrial customers
would fall open to competition each year (i.e. not that it would guarantee that
competitors would get these contracts, only that they would be open to
competition). EDF undertook that in its commercial proposals to customers it
would systematically propose a non-exclusive contract permitting supply from a
competitor.
- To abolish the resale restrictions, and inform
its clients that these clauses are null and void, and, subject to certain
conditions, to assist its clients to resell their electricity should they so
wish.
Comment: this case provides further clarification
of the role of large, possibly dominant electricity and gas companies. Given
EDF's very strong position on the relevant market, defined in a consistent
manner with past cases, it provides a clear indication that companies with
market shares exceeding 30% of the supply to large industrial customers need to
pay careful attention to their contractual arrangements, to make sure that the
Commission would not consider that they result in even de facto exclusive or
tying arrangements.
For the press release and further details from the
Commission, please
click here
.
These issues will be considered in more detail in
the
second EU Energy Law and Policy MasterClass to take
place in
Brussels
on 2-3 June, for more
information,
click here
.
More details can also be found in a
Claeys
& Casteels publication, "Competition Law and Energy Markets",
for more information, please
click here
.
(
from www.claeys-casteels.com)