A few months of the end of its mandate, Neelie Kroes strikes hard. The European Commissioner responsible for competition yesterday announced a fine of GDF Suez and E 1.1 billion.ON, it is to be shared the French and German gas markets. The Commissioner also announced the opening of an inquiry into the pharmaceutical industry, which it suspected of slow the spread of generic drugs.
In the energy, the European Commission imposed a fine of 553 million each to the German E.ON and GDF Suez. It is the first fines fixed by it for a breach of antitrust rules in the energy sector. They arrive just behind the fine of EUR 896 million Saint-Gobain was fined last November. Regarded as repeat offender, the French glass had then suffered a particularly severe treatment.
To understand the decision of yesterday, he must go back to 1975, when Ruhrgas, now subsidiary of E.And France gas (SFM) have decided to jointly build the Megal through the Germany pipeline to import Russian gas in Europe. The two companies had then agreed not to sell gas transported through this pipeline in the domestic market of the other party, according to the European Commission, to which the agreement lasted until 2005. However Europe voted a directive to liberalise the market for energy in 1998. For Brussels, 1975 agreements therefore became illegal at that time there.
"With this decision, the Commission sends a strong signal to the historical energy suppliers and reminded them that it will not tolerate any type of anti-competitive behaviour", said Neelie Kroes yesterday. "It sees Brussels attacks on all fronts in the energy, confirms Florence Ninane, associate lawyer in Allen Overy, a sector inquiry in 2007, proceedings against EDF on its long-term contracts, another on State aid and the transpose in France of the directives on the electricity rates..."
The indifferent scholarship
GDF Suez and E.ON challenged the decision and intend to appeal. The French group argues that "the legal and regulatory era context was very different from the one we know today on the market of energy". It will appeal to the Court of first instance of the European Communities (CFIEC). "The decision and, in particular, the high fines are not understandable", said for his part the pattern of E.ON Ruhrgas, Bernhard Reutersberg.
According to his boss, Wulf Bernotat, E.ON founded the chances of success of his appeal on a decision of the European Commission in a similar case between GDF and ENI in 2004. It also concerned territorial restriction clauses under which SFM prohibited ENI and Enel to resell in France natural gas GDF carried on their behalf between 2001 and 2003. For this first case of its kind, the European Commission did had not imposed fine, taking into account the fact that the gas sector was the subject of a deep process of liberalization. "GDF Suez and E.ON may argue on appeal, that at least, for the period 2001 to 2003, they should not be penalised and this for the same reasons", according to Florence Ninane.
The markets were not impressed by the fines. The German group yesterday won 1.66 at the Frankfurt Stock Exchange. The French, although he already provisioned the fine in its accounts, retreated, in turn, of 1.22. CM - CIC analysts feared a greater than EUR 1 billion fine.
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