ENEL TRADE-QUALIFYING CUSTOMERS
PRESS RELEASE
PRESS RELEASE
THE COMPETITION AUTHORITY HAS FOUND AGAINST ENEL FOR ABUSE OF A DOMINANT POSITION IN THE SALE OF ELECTRIC POWER TO QUALIFYING CUSTOMERS, IMPOSING A EUR 2.5 MILLION FINE
At its meeting on 27 November 2003 the Competition Authority resolved that ENEL Spa, through its subsidiary ENEL Energia Spa (formerly ENEL Trade SPA) had abused its dominant position on the market for the sale of electric power to qualifying customers. In particular, the investigation found that ENEL's commercial policy for the supply of electric power in 2002 through ENEL Energia had seriously violated of Article 82 of the EC Treaty by creating a captive market, foreclosing competitors.
The Authority imposed a fine of EUR 2.5 million on ENEL considering the large number of qualifying customers affected by this strategy (about 17% of the total), the limited duration (from the end of 2001 to the end of 2002) of these contracts, and the fact that the price increases had been suspended in October 2002.
The case had been raised in a complaint reporting a number of clauses in the standard electricity supply contract offered by ENEL Energia (formerly ENEL Trade) to qualifying customers for 2002. The exclusive rights clause in respect of foreign-produced energy, the prohibition on buying home-produced energy from third parties or at CIP6 auctions, price increases for energy bought from specific sources other than ENEL Energia coupled with a bonus at the end of 2001 to customers who renewed their contract for the following year, were deemed likely to enable ENEL to act as the only source for meeting all the energy requirements of some of the qualifying customers.
More specifically, this captive market conduct affected 17% of the qualifying customers (who bought 54% of the total volume sold by the company), making them increasingly dependent on acquiring top-up power to fully meet their basic energy consumption requirements, who could otherwise have acquired this top-up energy from sources other than ENEL.
Taken as a whole, the contractual provisions therefore imposed objective restrictions and disincentives on the customers to refrain from looking elsewhere to source the electric power supplies which ENEL itself considered to be more competitive and attractive to other suppliers - foreign-produced power and CIP6 electric power - thereby interfering with competition on a part of the relevant market.
Rome, 12 December 2003