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EU regulators target E.ON, Gaz de France with antitrust action
AFP
BRUSSELS
Petroleumworld.com 07 31 07
The EU's top regulator on Monday began antitrust proceedings against German energy group E.ON and French gas company Gaz de France over suspected collusion to protect their domestic markets.
The EU's action is part of an ongoing campaign to clean up commercial practices in the European gas and electricity markets.
The proceedings by the European Commission "focus on a possible agreement or concerted practice between E.ON and Gaz de France to keep out of each other's home market, even after the liberalisation of the European gas markets," the Commission said in a statement.
The move follows similar antitrust action launched by the European Commission last week against Electricite de France and Suez's Belgian unit Electrabel over suspicions they may have abused their market power in France and Belgium.
The European Commission, the EU's executive arm, has made encouraging competition in the energy market a top priority, although its efforts have often run up against resistance from some member states.
Despite opposition from France and Germany, the Commission is preparing to make proposals later this year requiring large integrated energy companies to split their generation and distribution business to encourage more competition.
The economy ministers of six EU countries, led by France and Germany, have written to the European Commission to protest its plans to reform the energy sector, Financial Times Deutschland reported Monday.
"The idea that only the complete separation of production and distribution can pave the way to the development of the EU's electricity and gas market must be rebutted," said the letter, written by French Economy Minister Jean-Louis Borloo and signed by his counterparts from Austria, Germany, Greece, Luxembourg and Slovakia, according to the newspaper.
Other EU members, including Britain, Spain and Sweden, support the wish of European Competition Commissioner Neelie Kroes to "unbundle" energy production and supply in an attempt to increase competition.
But EU heavyweights France and Germany are concerned that their major energy groups such as EDF and E.ON would be seriously weakened by such a move.
The initiation of proceedings against E.ON and Gaz de France originates from information obtained during surprise inspections carried out in May last year.
The "possible infringement" involves a suspected agreement between E.ON and Gaz de France in particular over supplies of natural gas transported over the MEGAL pipeline, jointly owned by E.ON and Gaz de France.
The pipeline carries gas across southern Germany between the German-Czech and German-Austrian borders on the one side and the French-German border on the other side.
Gaz de France in a statement said it was cooperating with the European Commission: "We have had exchanges with the Commission on this subject for several years. We will continue to offer our cooperation in this enquiry," the company said in a statement.
For its part, an E.ON spokesman said the matter hinged on an agreement reached with GDF in 1975 which expired in 2004 and had "no practical relevance".
According to the EU Commission the "major pipeline" is the only one bringing Russian gas to France and is a also an important supplier of Russian gas to Germany.
AFP 30 1441 GMT 07 07
Copyright© 2007 AFP. All rights reserved.
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