Investigations started in May 2006, including on site at GDF premises in France, following the scrutiny exercise of the energy sector competition inquiry, without being related to it. The proceeding against GDF (at that time) was formally opened in May 2008.
European Commission suspected GDF Suez of abusing its dominant position and restricting access for competitors to the French supply gas market. In particular, the Commission claimed the existence of practice contrary to antitrust rules, i.e.: long-term reservation of transport capacity to most import infrastructures into France (pipelines and LNG terminals); network of import agreements; GDF Suez behaviour regarding investments and capacity allocation at two LNG import terminals in France.
The legal basis for the Commission's decision is Article 102 of the Treaty on the Functioning of the European Union (TFEU) (former Article 82 ECT) on abuse of a dominant position. During the investigation, infringement to Article 101 TFEU (former Article 81 ECT) was also considered.
Remedies proposed by GDF Suez and agreed upon by the Commission include:
- the immediate release of a large part of its long-term reservations of gas imports (10%, i.e. 7 billion cubic metres per year);
- the progressive release of remaining long-tern reservations until its share goes below 50% of these reservations by 1 October 2014, which leaves GDF Suez time to explore different alternatives (e.g., expansion of existing or construction of new import infrastructures);
- import capacity at infrastructures located at entry points on the other side of the French borders.
However, there was:
- no structural remedy. Unlike E.ON and RWE, GDF Suez is not constrained to sell any of its assets. "Unbundling would not have resolved the competition problem in this case" dixit Commission;
- no major alteration to GDF Suez proposed remedies which could alterate its public service obligations. The Commission is of the opinion that "there are also a number of other options available for GDF Suez to meet such obligations - including, for example, storage and booking of short term capacity";
- liberalisation of capacity but not at all entry points equally, because of the diverse use of pipelines/terminals. Fos Cavou LNG terminal is identified as one of the key entry points.
After the consultation of interested parties and the Commission's market test, the Commission has adopted a legally binding decision committing GDF Suez to implement the commitments agreed upon (so-called "commitment decision" under Article 9 of Regulation (EEC) 1/2003 on the implementation of EU Treaty's competition rules). Such decision terminates the procedure, although not taking position on the suspected existence of an infringement. However, in the situation where GDF Suez is not implementing the decision, it will face a fine of up to 10% of the total worldwide turnover of the utility.
In the words of Competition Commissioner Neelie Kroes, "the remedies offered by GDF Suez provide a real opportunity for competitors to enter the Frenc gas market and so offer energy consumers greater choice of gas supplier and more competitive prices."
There is currently another antitrust case pending. This concerns both GDF Suez and E.ON, which were accused of collusion by agreeing not to compete against each other on the French and German gas markets (market-sharing agreement). The Commission decided to fine both companies in July 2009, for EUR 1.1 billion. Companies have announced that they will appeal.
Reference: European Commission, MEMO/09/536, IP/09/1872, 3 December 2009.
Comments