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Commission carries out antitrust raid on EDF

Published 12 March 2009
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The European Commission said yesterday (11 March) that it raided the premises of French electricity giant EDF on March 10 on suspicion of abusing its dominant market position.

The EU competition watchdog said in a statement that it carried out the raid with French regulatory authorities on suspicion that illegal conduct may have included actions to raise prices on the French wholesale electricity market. 

EDF confirmed the raid took place on Tuesday at the group's headquarters in Paris's La Defense financial district. 

"We are of course fully cooperating," said a spokesman at EDF, which is more than 80 percent owned by the French state. 

On Tuesday, the Commission, the competition watchdog of the 27-country European Union, had extended an investigation into what it called France's artificially low electricity tariffs for some companies. 

It launched an investigation in 2007 into regulated rates for certain large and medium-sized companies due to concerns the charges could distort competition in the EU. 

The EU executive has already started infringement proceedings against a group of EU countries, including France, over their regulated tariff schemes for businesses that might have violated the EU electricity liberalisation directive. 

It said it would now look at the extension of the so-called "return tariffs" system until 2010 and the inclusion of new beneficiaries. 

The state-administered so-called return tariff, which is below the market price, has been available since 2007 to consumers buying their electricity on the free market. 

France initially said companies could take advantage of the return tariff system for two years if they applied before 1 July 2007. Last August, it extended the system until 30 June 2010 and opened it up to new beneficiaries. 

"The Commission fears that the system of 'return tariffs' gives an unfair advantage to certain large companies over their competitors," EU Competition Commissioner Neelie Kroes said in a statement. 

The Commission said return tariffs had to date only benefited a small group of companies that was essentially made up of France's largest electricity users. 

(EurActiv with Reuters.) 

Background: 

The conclusions of a competition inquiry into the energy sector in January 2007 enabled the European Commission to gain an in-depth understanding of the functioning, and in some respects, the mal-functioning of the energy sector, which is of key importance for the overall competitiveness of the European economy. 

The inquiry also allowed the EU executive to draw conclusions as to where Commission action based on competition law is appropriate and effective. 

Surprise inspections are a preliminary step in investigations into suspected anti-competitive practices. The fact that the Commission carries out such inspections does not necessarily mean that the companies are guilty of anti-competitive behaviour, nor does it prejudge the outcome of the investigation itself. The EU executive respects companies' right of defence, in particular their right to be heard in the Commission's proceedings against them. 

There is no strict deadline to complete inquiries into anti-competitive conduct. Their duration depends on a number of factors, including the complexity of each case, the extent to which the undertakings concerned cooperate with the Commission and exercising the right of defence. 

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