CASE AT.39767 – E.ON GAS ANTITRUST PROCEDURE Council Regulation
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CASE AT.39767 – E.ON GAS (Only the English text is authentic) ANTITRUST PROCEDURE Council Regulation (EC) 1/2003 Article 9 Regulation (EC) 1/2003 Date: 26/07/2016 This text is made available for information purposes only. A summary of this decision is published in all EU languages in the Official Journal of the European Union. Parts of this text have been edited to ensure that confidential information is not disclosed. Those parts are replaced by a non-confidential summary in square brackets or are shown as […]. EN EN TABLE OF CONTENTS 1. Introduction ................................................................................................................... 3 2. Review of the Commitments on the Basis of Article 9(2) of Regulation No 1/2003 ... 5 3. Relevant market ............................................................................................................ 6 3.1. Gas wholesale markets .................................................................................................. 6 3.1.1. Relevant product market ............................................................................................... 6 3.1.2. Relevant geographic market ......................................................................................... 7 3.2. Gas retail market ........................................................................................................... 8 3.2.1. Relevant product market ............................................................................................... 8 3.2.2. Relevant geographic market ......................................................................................... 8 3.3. Gas transport market ..................................................................................................... 8 3.3.1. Relevant product market ............................................................................................... 8 3.3.2. Relevant geographic market ......................................................................................... 9 4. Dominant Position ........................................................................................................ 9 4.1. Downstream wholesale market ..................................................................................... 9 4.2. Retail market for the supply of gas to industrial customers ........................................ 10 4.3. Gas transport market ................................................................................................... 10 5. Abuse of Dominance................................................................................................... 11 5.1. The abuse set out in the 2010 Decision ...................................................................... 11 5.2. No risk of further foreclosure ..................................................................................... 11 5.2.1. The implementation of the Commitments .................................................................. 11 5.2.2. Regulatory changes ..................................................................................................... 12 5.2.3. Changes in commercial behaviour .............................................................................. 13 5.2.4. Significant spare capacities ......................................................................................... 14 6. Conclusion .................................................................................................................. 14 EN 2 EN COMMISSION DECISION of 26.7.2016 relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the EEA Agreement Case AT.39317 – E.ON Gas (Only the English text is authentic) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to the Agreement on the European Economic Area, Having regard to Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty1, in particular Article 9(2) thereof, Whereas: 1. INTRODUCTION (1) The present Decision is addressed to E.ON SE ('E.ON'), its indirect subsidiary Uniper Global Commodities SE ('UGC' which belongs to E.ON's direct subsidiary Uniper SE ('Uniper')) and Open Grid Europe GmbH ('OGE'). With the present decision, the commitments rendered binding by the Commission Decision of 4 May 2010 in this case are terminated. (2) On 4 May 2010, the Commission adopted a Decision pursuant to Article 9 of Regulation (EC) No 1/2003 ('the 2010 Decision') addressed to E.ON (at the time E.ON AG) including its subsidiaries E.ON Ruhrgas AG ('E.ON Ruhrgas', which was later renamed E.ON Global Commodities and subsequently became UGC) and E.ON Gastransport GmbH ('EGT', which was later renamed OGE) and thereby made legally binding the commitments which E.ON had offered ('the Commitments') in order to remove the Commission's competition concerns relating to E.ON's behaviour regarding the gas markets in Germany.2 (3) The Commission's preliminary analysis in the 2010 Decision found that E.ON – being a vertically integrated market player at the time with activities in the supply of gas (via its 1 OJ L 1, 4.1.2003, p.1. With effect from 1 December 2009, Articles 81 and 82 of the EC Treaty have become Articles 101 and 102, respectively, of the Treaty on the Functioning of the European Union ('TFEU'). The two sets of provisions are, in substance, identical. For the purposes of this Decision, references to Articles 101 and 102 of the TFEU should be understood as references to Articles 81 and 82, respectively, of the EC Treaty when where appropriate. The TFEU also introduced certain changes in terminology, such as the replacement of 'Community' by 'Union' and 'common market' by 'internal market'. Where the meaning remains unchanged, the terminology of the TFEU will be used throughout this Decision. 2 Commission Decision COMP/39.317 in the case E.ON Gas of 4 May 2010. EN 3 EN subsidiary E.ON Ruhrgas) as well as in the transport of gas as the owner and operator of one of the major gas transport grids in Germany (via its subsidiary EGT) – had infringed Article 102 of the Treaty by refusing access to its gas grid. E.ON had booked the largest part of the available transport capacities in its gas transport grid on a long-term basis. The 2010 Decision, on the basis of its preliminary analysis, set out that the long-term capacity bookings could be considered as refusal to give access to an essential facility leading to a foreclosure of competitors on the wholesale market on which regional wholesalers supplied gas to small local and regional distributors as well as on the retail market for the supply of gas to industrial customers. On both these markets E.ON was considered to be dominant. (4) In order to remove the Commission's concerns E.ON committed to significantly reduce its bookings of transport capacity in the EGT-grid. This reduction was supposed to be achieved in a two-fold manner: (i) via a one-off measure by annulling a certain amount of the E.ON long-term bookings3 by October 2010 ('Immediate Capacity Release') and (ii) by subsequently reaching a defined booking threshold ('the booking threshold') expressed as a certain share of E.ON's long-term bookings of the total available capacity4 ('E.ON's booking quota') at the latest until 1 October 2015. E.ON, moreover, committed to remain below the booking threshold for a further 10 years from the date on when it first reached it. E.ON's bookings fell under the booking threshold for the first time on 1 April 2011. On this basis, the Commitments are supposed to remain valid until 1 April 2021. As confirmed by the Trustee monitoring E.ON's compliance with the Commitments ('Monitoring Trustee'), E.ON has so far fully complied with the Commitments and has reduced its booking quota even significantly below the threshold defined in the Commitments. (5) By letter dated 25 November 2011, E.ON informed the Commission of its planned divestment of EGT, which was renamed Open Grid Europe (OGE), and asked for clarification about the validity of the Commitments. The Commission replied by letter dated 15 December 2011 that the Commitments rendered binding on EGT would continue to apply to OGE after the divestment. As set out in the Commission's letter, the remaining Commitments still binding on OGE consisted mainly of reporting obligations. (6) Apart from this it is also worth noting, that E.ON recently announced to spin off large parts of its business, in particular E.ON Global Commodities, which is the E.ON subsidiary active in the gas wholesale market and trading business accounting for by far the largest part of E.ON's bookings of gas transport capacities, into a company called Uniper. E.ON indicated that in this process, E.ON Global Commodities would become 3 The 2010 Decision defined 'long-term bookings' as bookings exceeding 1 year of duration. 4 The 2010 Decision considered as total available capacity the firm freely allocable capacities at all entry points in the relevant market area which can be booked long-term. A capacity is considered as firm if it is provided with the guarantee of no interruptions. Capacities are freely allocable if they can be booked in an entry-exit system which had been newly introduced in Germany in 2007. In an entry-exit system, gas transport customers do not any longer book a specific transport path for their gas, but reserve entry and exit capacities of the relevant grid