EU makes antitrust raids on German power firms

The European Commission raided Germany’s biggest electricity companies December 12 on suspicion of breaking European Union (EU) antitrust rules in a new crackdown by Brussels on German utilities.

“The commission has reason to believe that the companies concerned may have violated EC Treaty antitrust rules that prohibit restrictive business practices and/or abuse of a dominant market position,” the EU executive said.

German utilities RWE, E.ON, EnBW, and Vattenfall Europe confirmed their offices had been searched in the raids, which were carried out with German competition regulators. Companies in France, Italy, Belgium, and Austria also were visited by EU officials asking to take away documents and other data.

The commission, which is trying to ramp up its campaign to open the bloc’s energy markets, last searched the utilities in May on suspicion of anti-competitive practices. The commission said the latest surprise inspections were not related to May raids for suspected price-fixing, nor to a broader inquiry into competition in the European energy sector.

A final report on the energy sector competition inquiry is due in January. Last month, commission President Jose Manuel Barroso said proposals would be announced in January that are expected to discourage companies from both generating and distributing electricity.

EU warns 16 countries over energy market failures

On the same day as the utility raids, the European Commission stepped up its battle to open European Union energy markets to more competition, threatening 16 countries with court action for failing to implement EU energy rules.

Austria, Belgium, the Czech Republic, Germany, Estonia, Spain, France, Greece, Ireland, Italy, Lithuania, Latvia, Poland, Sweden, Slovakia, and Great Britain were sent final warnings, known as “reasoned opinions”, the EU executive said.

If a member state fails to comply with a reasoned opinion by the required deadline — typically two months — the commission may bring the case before the European Court of Justice, the EU’s top court.

“The commission regrets that insufficient progress has been made by member states in implementing in letter and in spirit EU 2003 directives setting up an internal market in gas and electricity,” it said.

Source: EU expected to fine switchgear firms for cartel

Further, a source close to another case said December 12 that the European Commission will fine some of Europe’s biggest engineering firms in the coming week for price-fixing in the electrical substation equipment market.

The case, opened by the commission two years ago, involves 21 companies and units including Siemens of Germany, Swiss engineering group ABB, and French state-owned nuclear energy group Areva, the source said.

“On Wednesday (Dec. 20), a commission decision concerning a cartel in the so-called gas-insulated switchgear sector is due,” the source said.

Gas-insulated switchgear is heavy, expensive equipment that controls the flow of energy. It is sold as a distinct product, and as part of fully functional power substations.

The source said the fines are expected to be large because the alleged cartel lasted for 16 years.

The source said ABB blew the whistle on the cartel, which makes the company eligible for leniency from the commission. It might escape a fine altogether, the source said.

Areva also hopes to pay a small or no fine because it bought a unit that is charged with cartel activities without knowing of its actions and the commission was informed of the cartel several months later, the source said.

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