EU steps up pressure on France to liberalise energy market

The Commission announced the opening of antitrust procedures on 26 July against the leading French energy company, EDF, and the Belgian branch of Suez, Electrabel – saying that it suspected both energy providers of foreclosure of the Belgian and French electricity markets. 

The Commission said the investigation will focus on the potential introduction of long-term exclusive purchase obligations in their supply contracts. Such practices are considered to be infringements of EU rules on abuse of a dominant market position, as they make it difficult for new entrants to the electricity supply market to acquire clients.

For both EDF and Electrabel, the investigations will focus on the market for industrial electricity consumers and in particular, whether the contracts that they concluded with their energy suppliers prevent them from switching to another electricity provider – due to specific clauses on exclusivity and contract duration.

In the context of the liberalisation of electricity markets, the Commission has already carried out a number of infringement procedures, namely against Italy’s ENI and Germany’s RWE (EURACTIV 14/05/07). It believes that a delay in opening up the electricity market could lead to higher prices and lower quality of services.

The move is the latest in a series of initiatives by Brussels to force France to open up its energy sector. Three weeks before the opening of the EU electricity market, on 1 July 2007, the Commission began an investigation into artificially low regulated electricity tariffs from the French group EDF. According to the Commission, this amounts to state-aid and should therefore be scrapped.

In January 2007, the Commission released a report on competition in the energy sector, announcing that it would make full use of its antitrust powers. One of the report’s conclusions is that new suppliers find it difficult to penetrate a number of electricity markets due to the prevalence of exclusive contracts. 

The Commission said that it hopes to bring the EDF and Electrabel cases to a close in the near future.

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