Brussels, 10/01/2007 (Agence Europe) - The report published on Wednesday by Competition Commissioner Neelie Kroes in the trajectory of the Commission's adoption of a vast package on energy (see other article), the final sectoral report launched in June 2005 on the energy markets confirms the existence of major problems on the market. These problems had already been highlighted in an intermediate report published last February (EUROPE 9133). It also concludes that consumers and companies are suffering from inefficiency and the cost of the gas and electricity markets.
Presenting the report to the press, Ms Kroes promised to take new steps, as well as increase inspections (already begun), to guarantee competition on the energy markets. With regard to implementation of competition rules, the Commission will make full use of its powers conferred to it through rules anti-trusts (Articles 81, 82 and 86 of the EC treaty), merger inspections (Regulation 139/2004) and controls on State Aid (Articles 87 and 88 of the EC treaty). On the subject of market concentration, described by the report as a “major concern”, the Commission will pay special attention to transfers and to the impact of long term upstream contracts on downstream concentration. It recalled that far-reaching structural measures are authorised under Articles 81 and 82 as remedies for infringements, which would be all the more severe if State aid were involved. Fighting collusion is clearly a Commission priority. The Commission clearly plans to fight attempts by undertakings to coordinate their behaviour in the marketplace rather than to compete. The Commission plans above all to combat vertical integration, which tends to create unequal access to essential market information, as well as the lack of access to infrastructure, and lack of, or delayed, investment by transmission companies with vertically integrated supply companies, preventing market integration. The sectoral investigation also revealed several general failings of the regulatory framework governing gas and electricity markets, which were taken into account in the Commission's examination of measures to regulate the internal market for gas and electricity.
Although the content of the final report on the sectoral investigation is worrying, its recommendations do not come as a surprise. The Commission's attention has been geared to questions regarding the abuse of dominant market position (spot inspections at E.ON, see EUROPE 9313) as well as national protectionism (of Endesa by the Spanish government, see EUROPE 9332) or excessive concentration (conditions attached to the Suez/GDF merger, see EUROPE 9306). (cd/eh)