EU Commission Investigates E.ON Ruhrgas for Alleged Abuse of Dominant Position

Nelly Kroes, the European Commission’s top antitrust official, confirmed yesterday that her office is investigating E.ON Ruhrgas, a subsidiary of E.ON AG, on grounds of alleged abuse of a dominant market position.

E.ON Ruhrgas allegedly limits gas transport capacities by concluding long-term transmission contracts with E.ON Gastransport, the transmission company, thereby obstructing competition.

Reportedly, the commission did not open official proceedings, but is trying to resolve the matter in talks with E.ON.  There is speculation about the possible concessions E.ON may have to make to avoid proceedings.  In a similar case, E.ON competitor RWE pledged to sell its German gas transmission grid to avert an EU antitrust fine.

Source: Frankfurter Allgemeine, 4 December 2009, page 15

BRUSSELS (Dow Jones)–The European Commission’s top antitrust official, Neelie Kroes, Thursday said her office is investigating German natural gas company Ruhrgas, a subsidiary of energy giant E.ON AG (EOAN.XE).
Kroes, speaking to a news conference in Brussels, didn’t provide details of the investigation.
E.ON Ruhrgas wasn’t immediately available to comment.
Kroes’ comments came only a few days after German daily newspaper Financial Times Deutschland last week reported that the commission is investigating Germany’s largest gas importer and midstream company over alleged anti-competitive behavior.
Citing unnamed industry sources the newspaper reported that E.ON Ruhrgas is allegedly thought to have limited gas transport capacities and thereby obstructed competition.
The report also said that E.ON and the commission are in talks seeking a compromise.
Earlier Thursday, the commission said it has settled its antitrust investigation into GDF Suez SA’s (GSZ.FR) alleged abuse of its dominant position in the French gas market, accepting the company’s promise to dramatically reduce its presence in the country’s gas import infrastructure.
The commission’s investigation of Ruhrgas is the latest in a string of E.U. probes into the German gas market over the past few years.
Earlier this year, E.ON and GDF Suez were each fined EUR553 million by the commission for agreeing not to compete in each other’s national gas markets.
RWE AG (RWE.XE) last year pledged to sell its German gas transmission grid to avert an E.U. antitrust fine.
Also in 2008, E.ON reached a similar agreement with the commission over alleged anti-competitive behavior in the electricity market.
At the time, E.ON committed to sell its German power transmission grid as well as around 5 gigawatt of power generation capacity to avoid a fine.
E.ON last month agreed to sell the power grid to Dutch network operator TenneT TSO BV for around EUR1.1 billion. It also already sold the bulk of the generation capacity in deals with France’s GDF Suez, Germany’s EnBW Energie Baden-Wuerttemberg AG (EBK.XE) and Austria’s Verbund AG (VER.VI).