COMMITMENT PROCEEDINGS UNDER ARTICLE 9 OF REGULATION 1/2003 IN THE EUROPEAN ENERGY MARKETS
E. A General Analysis of and the Likely Detrimental Effects of Commitment- Commitment-based Enforcement Policy
2. The Intervention of the Commission in the Regulated Markets
As mentioned before, commitment-based enforcement in EU competition law seems to be convenient tool for the Commission to facilitate market regulation, since commitment proceedings permit the Commission to prospectively influence the behaviour and/or structure of individual firms.97 Given that the Commission has broad discretion to approve commitments that would not have been imposed under prohibition decisions, commitment decisions may be adopted in sectors where the Commission is pursuing a specific aim such as creating a well-functioning competitive market.98 The increase in the number of investigations concluded through commitment decisions in the energy markets as well as in the number of behavioural and/or structural commitments imposed
93 Papp, supra n 86, 955
94 Ibid
95 A. De Hauteclocque and L. Hancher, ‘Manufacturing the EU Energy Markets: The Current Dynamics of
Regulatory Practice’ (2010) EUI Working Papers RSCAS 2010/01
<http://ideas.repec.org/a/sen/journl/v11y2010i3p307-335.html> (accessed 16 February 2013), p. 12
96Georgiev, supra n 47, 1024
97 Dunne, supra n 22, 427
98 Schweitzer, supra n 90, 13
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on investigated undertakings implies that the Commission is attempting to create a single and competitive well-functioning energy market through these commitments, which may resemble regulation rather than real antitrust enforcement.99
The Article 9 procedure provides the Commission with quasi-regulatory powers by allowing it to build up a desirable market structure, which it otherwise could not. The limitation of contract duration/volume is a typical example of such influence (Chapter 2).100 Furthermore, under commitment proceedings the Commission is able to tailor the remedies to both the specific market conditions and its competition concerns. In most of the energy cases to date, the issues have been the difficulty for the competitors of incumbents to enter the market or explore their market powers. The commitment procedure has allowed the Commission to reach agreements on very detailed plans to introduce flexibility in market access, inter alia through divestiture of the ownership of specific generation or network businesses, as will be seen below, and through behavioural remedies such as freeing up some network capacities (Chapter 3).
This intervention of the Commission may at some points be beneficial for market operators as it removes regulatory shortcomings from the market. On the other hand, thanks to the wide remedial discretion of the Commission, less-strict application of the principle of proportionality and the limited judicial review of Article 9 decisions, the use of ex-post antitrust enforcement for ex-ante market regulation under commitment proceedings may increase the legal uncertainty for market operators, regulators and national courts, as mentioned above.101
99 S. Grassanil, ‘The Increase Abuse of Commitments in European Antitrust Law: Stockholm Syndrome?’
(2013) Vol.3 Competition Policy International Chronicle, p. 5
100 Gas Natural (Case COMP/37542) [2000]; Distrigaz (Case COMP/B-1/37966) Commission Decision [2007]; Gaz de France (Case COMP/39316) Commission Decision [2009]; E.ON Gas (Case COMP/39317) Commission Decision C (2010) 2863 final [2010]; Long-term Contracts France (Case COMP/39386) Commission Decision [2010]
101 For further reading about discussion over the intervention of the Commission in regulated markets see N. Economides, ‘Competition Policy in Network Industries: An Introduction’ (2004) NET Institute Working Paper 04-23 <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=386626> accessed 7 February 2013;
Geradin and O’Donoghue, supra n 15; G. Monti, ‘Managing the Intersection of Utilities Regulation and EC Competition Law’ (2008) Vol.4(2) The Competition Law Review 123; M. Hellwig, ‘Competition Policy and Sector-specific Regulation for Network Industries’ (2008) Max Planck for Research on Collective Goods Bonn 2008/29 <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1275285> accessed 5 February 2013; I. Colomo, ‘On the Application of Competition Law as Regulation: Elements for a Theory’ (2010)
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In the next section, the focus will be on certain investigations in the energy markets that were concluded through commitment proceedings, particularly with regard to the appropriateness of the structural or quasi-structural commitments imposed on the undertakings concerned, in order to analyse whether the Commission has certain regulatory objectives in its antitrust investigations in the energy sectors. After that, the chapter will attempt to provide a hypothetical framework (a guideline) for better use of commitment proceedings.
III. Case Law
As mentioned before, a number of commitment decisions in the energy markets show the eagerness of the Commission to solve competition problems in these markets on the basis of Article 9. The ambition of the Commission may stem from the potential of commitment decisions to (i) introduce competition into the markets more quickly than prohibition decisions, and (ii) achieve regulatory goals that would be difficult to achieve through sector regulation. This is because the market regulation in the energy sectors has not been fully completed, since to a large extent it incorporates political compromises. While prohibition decisions constrain the scope of the Commission’s remedial action due to the principle of proportionality, commitment decisions allow it to impose structural or behavioural remedies that go beyond what would be imposed under Article 7 of Regulation 1/2003. Therefore, it is significant to examine the decisions of the Commission, namely E.ON,102 CEZ,103 RWE,104 ENI,105and SvK.106 The aim of analysing these cases is to assess the appropriateness of the commitments imposed in terms of addressing the concerns of the Commission. After that, the chapter will propose a hypothetical legal framework guideline, which could eliminate these deficiencies and increase the efficiency of commitment proceedings.
Vol.29 Yearbook of European Law 261, p. 265; J. Tapia and D. Mantzari, ‘The Regulation/Competition Interaction’ in D. Geradin and I. Lianos (eds.) Research Handbook on European Competition Law:
Substantive Aspects (Edward-Elgar 2013), p. 588
102 There are two cases involving E.ON. The first case relates to the German electricity wholesale market (case COMP/39388), whereas the second case relates to the German electricity balancing market (Case COMP/39389). Since the Commission concluded the cases in a single decision this thesis examines the cases as if they were a single case.
103 CEZ (Case AT/39727) Commission Decision C(2013) 1997 final [2013]
104 RWE Gas Foreclosure (Case COMP/39402) Commission Decision [2009]
105 ENI (Case COMP/39315)Commission Decision [2010]
106 Swedish Interconnectors (Case COMP/39351) Commission Decision [2010]
159