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I740 - Gas distribution: 2iGas, Linea Distribuzione and their parent companies fined for competition-restricting agreement


PRESS RELEASE


PRESS RELEASE

GAS DISTRIBUTION: ANTITRUST FINES 2iGAS, LINEA DISTRIBUZIONE AND THEIR PARENT COMPANIES FOR COMPETITION-RESTRICTING AGREEMENT

By forming a Temporary Consortium to take part in the tender called by the Municipality of Casalmaggiore despite having the necessary requirements to compete individually, the two operating companies restricted competition in the natural gas distribution market. They have been fined a total of 1,334,983 Euros. The parent companies E.ON Italia (a parent company of 2iGas at the time) and Linea Group Holding have also been found guilty of the competition offence.

The Autorità Garante della Concorrenza e del Mercato, in its meeting on 2nd August 2012, decided that 2iGas (at the time E.ON Rete), which carries out natural gas distribution in around 300 Italian municipalities, and Linea Distribuzione (LD), which operates distribution services in 72 municipalities within the Provinces of Bergamo, Brescia, Cremona, Lodi, Padua, Parma, Pavia and Vicenza, formed a competition-restricting agreement. LD and 2iGas formed a Temporary Consortium to take part in the tender called by the Municipality of Casalmaggiore, as the leader of eight Municipalities in the Province of Cremona, despite being able to bid individually as competitors. According to the Antitrust Authority, the inquiry launched in light of a query from the Municipality of Casalmaggiore showed that, in the specific case of the tender under consideration, the Temporary Consortium was used to divide up the roles according to status quo ante logic. The Temporary Consortium, drawn up following the granting of the tender, in fact expressly provided for both companies continuing to manage the gas distribution service independently, in the exact same Municipalities in which each had previously operated. The mutual elimination of competition by joining forces furthermore allowed 2iGas and LD to obtain the optimum economic conditions for the tender (the Temporary Consortium was actually the only participant in the tender, and offered the minimum possible price).

2iGas and LD’s parent companies were also involved in the competition offence, as they were constantly and regularly updated on the issues faced and the decisions to take on the strategy to pursue in bidding for the tender for the granting of gas distribution contracts.

For the actions established, the Antitrust Authority decided to impose a joint and several fine totalling 1,205,308 Euros on E.ON Italia (at the time the parent company of E.ON Rete, which later became 2iGas) and 2iGas, and a joint and several fine totalling 129,675 Euros on Linea Group Holding.

 

Rome, 13th August 2012