ENERGY: ENEL ENERGIA FINED FOR IMPROPER COMMERCIAL PRACTICES
PRESS RELEASE
PRESS RELEASE
ENERGY: ANTITRUST AUTHORITY FINES ENEL ENERGIA OVER IMPROPER COMMERCIAL PRACTICES
Fines total Euro 1.1 million. Enel Energia moved residential customers from the Protected Market to the Free Market and acquired gas customers by initiating unrequested supply of electricity and/or gas and hindering the exercise of customers’ right to change their minds. Aggressive marketing also used. “Bioraria” and “Vantaggio 5 1” advertising campaigns declared misleading.
Fine of Euro 100,000 on Enel holding company, deemed responsible for commissioning TV ads.
The Italian Competition Authority, at its meeting on 7 August 2008, decided to fine Enel S.p.A. and Enel Energia Euro 100,000 and 1.1 million respectively for improper commercial practices.
In the Antitrust Authority’s view, Enel Energia’s conductwas intended to acquire contracts for the supply of electricity and gas using separate practices that heavily conditioned consumers’ choices. As for the Enel parent company, the Antitrust Authority established its responsibility for the commissioning of a television advertisement deemed misleading.
ENEL ENERGIA’S CONDUCT
The Antitrust Authority found that Enel Energia, a Free Market company of the Enel group, had adopted improper commercial practices:
a) in moving customers from the so-called Protected Market to the Free Market for electricity;
b) in initiating the unrequested supply of natural gas.
The company had adopted aggressive commercial practices in initiating unrequested electricity and gas supplies and in some cases demanding payment, hindering the exercise of the right to second thoughts and using aggressivemarketing procedures.
Furthermore, the company’s offers for the supply of both electricity and gas gave consumers information which was untrue, inexact or incomplete. Enel Energia also failed to furnish, through its sales channels (call centers and agents), relevant news as to its activities, market conditions, how to take advantage of its offers and the contract details. In particular, it was not made clear to users that the contracts meant moving to a new supplier and, for electricity, moving from the Protected to the Free Market, thus subject in the future to changes in market prices. In a number of cases, the possibility of exercising in a timely fashion the right of withdrawal from the contract was not specified. The Authority punished these two separate practices with fines of Euro 500,000 each.
MISLEADING ADVERTISING CAMPAIGNS
The Authority also declared to be misleading the advertising campaigns promoting the ‘Bioraria’ and ‘Vantaggio 5 ’ offerings by way of mailings to potential customers and TV advertising, and fined Enel Energia Euro 100,000. As regards the television advertisement, the Antitrust Authority also established the responsibility of the Enel parent company for having commissioned the advertisement and fined it Euro 100,000.
The investigation was begun on 21 February 2008 after numerous consumers reported having complained to Enel Energia about the initiation of electricity and/or gas supplies that they had never requested or with regard to which they had unsuccessfully tried to exercise, in a timely fashion, their right to change their mind or to withdraw. There were further complaints about the allegedly misleading nature of a number of advertisements promoting electricity and gas offerings called “Bioraria” and “Vantaggio 5 ” which did not make clear that these offers involved moving to a new supplier and, in the case of electricity, transitioning from the Protected Market to the Free Market.
Rome, 15 September 2008