Transcript The Enforcement of EU Competition Law in the energy

THE ENFORCEMENT OF EU COMPETITION LAW IN THE
ENERGY SECTOR THROUGH
NON-ADVERSARIAL COMMITMENTS
Yane Svetiev and Lucila de Almeida (EUI)
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Introduction and Structure
1. Role of Art. 9 Commitments in competition enforcement
2. Commitments Decisions in the Energy Sector
2.1. Tailoring Commitment Remedies
2.2. Accountability Mechanisms for Article 9 decisions
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1. Commitment Decisions under
the Article 9
• Non-adversarial case resolutions
– Characterized as being among the most “high profile activities” of
the EU Commission and
– Also used by National Competition Authorities (NCAs);
• Many cases in the energy sector decided through
commitments procedure
– Literature: Article 9 is most commonly used in energy sector and in
cases involving intellectual property
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1. Commitment Decisions under
the Article 9
10 Commitment Decisions in the energy sector
2006
Repsol
Oil
COM 38.348
April 2006
2007
E.ON.
Electricity
COM 39.388
COM 39.389
November 2008
Distrigaz
Gas
COM 37.966
October 2007
2010
2009
2008
RWE
Gas
COM 39.402
March 2009
EDF
Electricity
COM 39.386
March 2010
SvK
Electricity
COM 39.351
April 2010
GDF
Gas
COM 39.316
December 2008
2012
ENI
Gas
COM 39.315
September 2010
E.ON.
Gas
COM 39.317
May 2010
Siemens/Areva
Electricity
COM 39.736
June 2012
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1. Commitment Decisions under
the Article 9
Research Questions
• What are the reasons for the extensive use of non-adversarial
procedures both by the Commission and by national
authorities in the energy sector?
– peculiar sectoral characteristics that make such a procedure particularly
adapted to the energy context?
• What are the distinguishing features of the use of nonadversarial procedures to restructure private relationships in
the energy sector by the Commission?
• What role do national actors play in this process and are they
a check and source of accountability on the Commission’s
interventions?
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1. Commitment Decisions under
the Article 9
Characterizing the Article 9 procedure
1. Settlements
1.1. Procedural: non-adversarial closure of cases
1.2. Substantive: clear-cut / non-serious cases
2. Tools of dynamic learning
2.1. Procedural: shift to monitoring
2.2. Substance: liability rules for an effects based policy
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1. Commitment Decisions under
the Article 9
1. It is difficult to argue that energy commitment decisions stem
from cases in which the infringement is relatively clear based on
extant community law.
The majority of the cases based on abuse of dominance theory.
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1. Commitment Decisions under
the Article 9
Impugned conduct has involved
1.1. the manner in which a vertically-integrated company uses its
own infrastructure or even its own capacity;
Compa
ny
Economic Activity
Impugned Conduct
E.ON.
Electricity generation
and transmission system
(i) withdraw available capacity in its transmission system and (ii) avoid
third parties from making new investments in electricity generation
RWE
Gas Transmission system
and supply market
(i) refuse to supply gas transmission services to third parties and (ii)
behavior aiming at lowering the margins of RWE's downstream
competitors in gas supply (‘margin squeeze’)
GDF
Gas Transmission System
and supply market
Foreclose access to gas import capacities
E.ON.
Gas Transmission system
Book large parts of the available firm and freely allocable entry
capacities on its gas transmission grid
ENI
Gas transmission system
Refuse to supply transportation capacity on its natural gas pipelines
SvK
Electricity generation
and transmission system
Anticipate internal congestion by reducing interconnection capacity for
trade between Sweden and neighboring Member States
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1. Commitment Decisions under
the Article 9
Impugned conduct has involved also
1.2. the length of the contracts that energy supplier has
concluded with its customers
Company
Economic Activity
Impugned Conduct
Distrigaz
Gas Supply Market
Limit the scope of long-term gas supply contractors for other gas
suppliers concluding contracts with customers.
EDF
Electricity Supply
Market
Conclude supply contracts that limit the possibilities of other
undertakings of concluding contracts for the supply of electricity to
large industrial customers in France
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1. Commitment Decisions under
the Article 9
2. The commitments procedure is not limited to the cases that do
not raise novel or disputes issues of law or its application to the
facts (i.e. E.ON. Case)
Comapny
Econonomic Activity
Commitment
E.ON.
Electricity generation
and transmission
system
(i) Divest its shares on electricity generation, which sum the
generation capacity of approximately 3.300 MW, (ii) divest its stakes
on the transmission system business consisting of its 380/220 kV-line
network .
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1. Commitment Decisions under
the Article 9
3. It cannot be said that the cases concluded pursuant to
commitments in the energy sector are non-serious.
Company
Economic Activity
Impugned Conduct
E.ON.
Electricity generation
and transmission
system
(i) withdraw available capacity in its transmission system and; (ii)
avoid third parties from making new investments in electricity
generation.
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1. Commitment Decisions under
the Article 9
The substance of the cases often raises complex issues, requiring
both weighing and trading off both arguments and likely effects.
• The use of commitment decisions in the enforcement of EU
competition law has been driven by the transformation of
competition policy from a relatively blunt tool of economic
integration towards a policy instrument increasingly sensitive to
the effects of market conduct on policy relevant variables.
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2. Commitment Decisions in
Energy Sector
2.1. Types of Commitments and their tailoring
Decisions that involve divestment capacity for generation or
transmission of energy.
Company
Economic Activity
Tailoring of Commitment
E.ON.
Electricity
generation and
transmission system
(i) Divest its shares on electricity generation, which sum the
generation capacity of approximately 3.300 MW, (ii) divest its stakes
on the transmission system business consisting of its 380/220 kV-line
network .
RWE
Gas Transmission
system and supply
market
(i) Divest its entire current German high-pressure gas transmission
system including networks co-owned with other parties, (ii) supply
the purchaser for a limited period of up to five gas years.
ENI
Gas transmission
system
(i) Divest its current shareholdings in companies related to
international gas transmission pipelines; (ii) Not prolong, renew or
enter into any new transport contract to Italy for its benefit on these
pipelines.
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2. Commitment Decisions in
Energy Sector
2.1. Types of Commitments and their tailoring
Decisions that adopts more flexible approaches towards stimulating
entry, by seeking to constrain autonomy and contract behaviour of
investigated undertakings
Company
Economic Activity
Tailoring of Commitment
Distrigaz
Gas Supply Market
(i) Return to the market an average minimum of 70% of the gas
volume supplied by Distrigaz to industrial users every year; (ii)
restrict the term of its contracts with them to five years.
GDF
Gas Transmission
System and supply
market
(i) Release 15% of the H gas consumption in whole France; (ii)
release significant firm long-term capacities in two terminals; (iii)
limit to less than 50% its long-term booking capacity in two
balancing zones.
EDF
Electricity Supply
Market
(i) Return to the market 65% of the electricity supplied by EDF every
year; (ii) sign contracts no longer than five years; (ii) customers
would choose to obtain electricity from several suppliers.
E.ON.
Gas Transmission
system
(i) reduce its booking share in the available capacity in immediate
and long-terms to 15-20% of capacities; (ii) reduce its booking share
into the NCG and the L-gas grid to 50% and 64%.
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2. Commitment Decisions in
Energy Sector
2.1. Types of Commitments and their tailoring
Decision that are less intrusive, in part reflecting differences in
conduct and context investigated and in part different remedial
commitments that parties were prepared to offer or agreed to.
Company
Economic Activity
Tailoring of Commitment
Siemens/A
reva
Electricity
Generation
(i) Reduce the effects of the non-compete clause from 11 years to 3
years in the joint venture Areva NP.
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2. Commitment Decisions in
Energy Sector
2.2. Accountability Mechanisms under Article 9
The review mechanisms are distinguished along two dimensions:
• Timing of input
• Source of review between judicial and peer input into the
commitments proposed and adopted as part of an Art. 9
decision.
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2. Commitment Decisions in
Energy Sector
Ex Ante Review:
• Market Testing of the Commitments
• ECN Advisory Committee (made-up of NCA representatives)
Ex Post Review:
• Reports provided either by the entities offered to the
commitment or by external “trustees” involved in monitoring
the implementation of the remedies.
• Administrative or Private Law enforcement at the national level.
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3. National Dimension as a source of
accountability
In the remainder of the paper, we aim to explore three principal
arguments:
• Characterize non-adversarial resolution practice of national
competition authorities in energy sector;
• Compare objectives pursued by national competition authorities
in energy market through commitments with objectives of
national energy regulators;
• Understand the role that actions before national courts play in
overall mix of interventions
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Thank you!
[email protected]
[email protected]
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