UNAPACE/ENEL
PRESS RELEASE
PRESS RELEASE
The investigation into ENEL is completed
The Antitrust Authority has completed its investigation into ENEL, that began on 12 November 1998, in order to ensure whether the following were likely to constitute an abuse of ENEL's dominant position on the national electric power supply market, in violation of article 86 of the E.C. Treaty:
(1) a right of preemption granted to ENEL, in the event of better offers from competitors (the "British clause") and
(2) the conclusion of the contract covering several years for the supply of electric power as part of the Group agreements concluded in 1998 with several potential eligible customers.
The Authority concluded that both a "British clause" and a "duration clause" in contracts concluded under a statutory monopoly by a company occupying a dominant position, with a deadline date subsequent to the date the market was opened up to competition, constituted violations of the prohibition on the abuse of a dominant position under article 86 of the E.C. Treaty, because they were likely to limit production and restrict market outlets.
The Authority nevertheless decided not to fine ENEL in view of two circumstances. Firstly, during the investigation, ENEL had voluntarily frozen the application of the "British clause" in the contracts concluded during 1998, where it required the eligible customer to notify ENEL of any more competitive offers it received, and gave ENEL the corresponding right of preemption.
Secondly, ENEL had supplied its authentic interpretation of the "duration clause" set out in agreements concluded after 1 October 1998. According to its interpretation, ENEL's customers may ask to renegotiate the supply agreement, even when new supply offers are "the result of new operators entering the market, or the increase in the overall supply from operators already present on the market".
On the basis of this "authentic interpretation" of the supply clause provided by ENEL, the eligible customer could therefore not only unilaterally terminate the contract during the twelve-month period after qualifying for eligibility, according to the provisions of Directive 120/98 issued by the Electric Power and Gas Authority, but also request ENEL in the following period to renegotiate the contract in the event of changes in tariffs or legislation, which also included new contractual opportunities, following the liberalization of the market.
The Authority therefore concluded that ENEL had removed all the contractual instruments that would otherwise have enabled it to abuse its dominant position, distorting competition on the liberalized electric power supply market from the date the Directive 96/92/EC had been incorporated into Italian law.
Rome, 19 April 1999