Brussels, 08/07/2009 (Agence Europe) - On Wednesday 8 July, the European Commission imposed fines totalling €1 106 000 000 on E.ON AG and its subsidiary E.ON Ruhrgas AG (of Germany) and on GDF Suez SA (of France) for market sharing in breach of EC Treaty rules on cartels and restrictive business practices (Article 81). E.ON/E.ON Ruhrgas and GDF Suez are fined €553 000 000 each. Competition Commissioner Neelie Kroes said, "This decision sends a strong signal to energy incumbents that the Commission will not tolerate any form of anticompetitive behaviour”. GDF immediately explained that it would appeal to the Court of First Instance and affirmed in a press release that it “completely disagreed with the conclusions of the Commission”.
When Ruhrgas AG (now E.ON Ruhrgas and part of the E.ON group) and Gaz de France (GDF Suez SA) decided in 1975 to build the MEGAL pipeline together, they explicitly agreed in two letters that GDF would not sell any gas transported over the MEGAL in Germany and neither would Ruhrgas in France. They maintained the market-sharing agreement after European gas markets were liberalised, and only abandoned it definitely in 2005. E.ON (€87 billion worldwide turnover in 2008), through its subsidiary E.ON Ruhrgas, and GDF Suez (€68 billion worldwide turnover in 2008) are the leading suppliers of natural gas in Germany and France respectively. The Commission's decision constitutes the ends the enquiry (launched with surprise inspections in 2006) and the formal examination procedure began in July 2007.
In a press release, GDF stated, “the legal and regulatory context at the time was very different to that of the energy market today”. Monopolies were tolerated in 1975 but agreements between suppliers became illegal in April 1998. According to the Commission, the two parties actively maintained their understanding in the full knowledge of its illegality, through meetings and communications at different levels, well after the opening up of the European gas markets in 2000 and up to 2005.
The fines are based on the 2006 Guidelines on Fines, in force at the time the Statement of Objections was notified in June 2008. Within this limit, the 2006 Guidelines provide that fines may be based on up to 30% of the company's annual sales on markets affected by the infringement, multiplied by the number of years of participation in the infringement. This still remains subject, however, to Council Regulation 1/2003, which provides that companies may be fined up to 10% of their total annual turnover. (C.D./trans/rh)