Preliminary EC report on competition in electricity and gas

European Commission draft preliminary report (several PDF files, 192 pages plus appendices) on its inquiry into competition in electricity and gas markets. The report highlights the possibility that networks of long-term purchase or infrastructure access agreements (particularly for interconnectors) entered into by incumbents may lead to "vertical foreclosure" and national segmentation of markets, in possible breach of Article 81. It also reports allegations (but no more than allegations) that new entrants lack effective access to networks, in possible breach of Article 82 combined with sector-specific rules. The report also claims that there is a "lack of reliable and timely information" (colourfully described as "the lifeblood of healthy competition") about the operation of the networks and the price formation process; this claim appears to go beyond allegations that information is sometimes unfairly withheld by dominant companies in breach of Article 82.

The Commission proposes to rely on the EC Merger Regulation to address concentration, to focus enforcement of Article 81 and Article 82 on the issues identified in the report, and to make regulatory proposals to require additional information flows and a possible "full structural unbundling" of incumbent companies.

Responses by Monday 1 May 2006.

For further information or advice please contact Franck Latrémolière.

Filed under DG Competition, Electricity.

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