Vienna economic talks Sofia, 4 April 2012 Liberalisation of the Energy Market

1. BUNDESWETTBEWERBSBEHÖRDE Vienna economic talks Sofia, 4 April 2012 Liberalisation of the Energy Market Protection of Competition Dr. Theodor Thanner

2. Development Gas and Electricity Market BUNDESWETTBEWERBSBEHÖRDE • 1985 Completing the internal market: White paper from the Commission to the European Council • 1996 First Directive of EC concerning Liberalisation of electricity and gas • 1998 First Austrian law on electricity (ELWOG) • 2nd and 3rd European Package => 2nd and 3rd Evaluation of Austrian Law

3. Current situation BUNDESWETTBEWERBSBEHÖRDE • still few producers • still few market entries • still low changing mobility of consumers • grids – still lasting monopoly • still few transparency • still few information for consumers • but a lot of innovation (smart meter, electric vehicles) • and fast changing market

4. Sector Inquiry BWB BUNDESWETTBEWERBSBEHÖRDE • Start 2004: critical remarks from market players concerning liberalisation • 786 requests of information were sent to customers, suppliers, network operators etc. • expert interviews with a lot of market participants • four studies were published (www.bwb.gv.at) • together with most market players a working package for the electricity industry was established

5. Sector inquiry - Working package BUNDESWETTBEWERBSBEHÖRDE • reduction of market entry barriers (information-exchange) • working unbundling • improvement for the customers: • transparency of invoice, • limited time period for supplier change, • code of behaviour for the suppliers • transparent pricing • comprehensible invoices • periodical monitoring • Gas: expansion of transport and storage capacities • long term contracts

6. Theoretical background - Abuse BUNDESWETTBEWERBSBEHÖRDE Art 102 Precondition: • Market power/dominance in the relevant market The Commission considers that an undertaking which is capable of profitably increasing prices above the competitive level for a significant period of time does not face sufficiently effective competitive constraints and can thus generally be regarded as dominant. • Abuse - Foreclosure ‘anti-competitive foreclosure’ is used to describe a situation where effective access of actual or potential competitors to supplies or markets is hampered or eliminated as a result of the conduct of the dominant undertaking whereby the dominant undertaking is likely to be in a position to profitably increase prices

7. Theoretical background - Agreement BUNDESWETTBEWERBSBEHÖRDE • Art 101: Prohibition of collusive conduct between two or more independent companies Exemption (agreement): Austrian Cartel Law: • participation/advantages for customers • technical or economical developement • increase of the production or distribution system Security of supply

8. Main problems and cases BUNDESWETTBEWERBSBEHÖRDE • Long Term Contracts • Comp/37542 Gas Natural, Endesa • Bundeskartellamt B8-113, E.ON Ruhrgas & Stadtwerke • K-241 STGW • Exclusivity and Destination Clauses • Comp/38085 Territorial Restrictions Austria, OMV, Gazprom • Refusal to supply and margin squeeze • Comp/ 37542 , Gas Natural, Endesa • Rebates & invoices • Austrian sector inquiry

9. For introducing more Competition… BUNDESWETTBEWERBSBEHÖRDE • building awareness: discussion with EVUs • investigation and combating cartelS and Abuse of Dominance: case to case evaluation – no generalisation possible • if you have doubts, ask why you are doing things that way and keep in mind there are: Leniency programs

10. BUNDESWETTBEWERBSBEHÖRDE Thanks for your attention! theodor.thanner@bwb.gv.at www.bwb.gv.at Twitter: BWB_WETTBEWERB