1. 1
Competition in the Energy Sector – The EU Perspective Prof. Dr. Hans Vedder – University of Groningen 1

2. Overview Competition in the EU Energy Sector Overview of main trends2
Overview
Competition in the EU Energy Sector
Overview of main trends
Application to EU-Russia Energy
Dominance
Foreclosure
Market Partitioning

3. Competition in EU Energy3
Competition in EU Energy
EU competition law consists of (inter alia)
Prohibition of restrictive agreements
Prohibition of abuse of dominance
Both applied in the energy sector
Market sharing / partitioning arrangements
Vertically integrated companies using networks to foreclose access increase prices or discriminate

4. Competition in EU Energy4
Competition in EU Energy
Purpose is to come to an internal energy market
Free movement
Undistorted conditions of competition
But:
Low degree of interpenetration
High levels of concentration
Commission information asymmetry
Sector inquiry and

5. EU Russia Energy Gazprom is the EU’s largest third country supplier5
EU Russia Energy
Gazprom is the EU’s largest third country supplier
EU is Gazprom’s largest export destination
EU is becoming increasingly import dependent
Result: an increasingly close and difficult relationship
Difficulty: EU competition and Gazprom

6. EU competition and the upstream gas sector6
EU competition and the upstream gas sector
Several earlier cases involving market partitioning (destination clauses etc.)
Difficulty to find right balance between
Market access and opening  lower prices, high contestability
Need to recoup upstream investments  high prices, low contestability

7. EU competition law and Gazprom7
EU competition law and Gazprom
Sept Dawn Raids
Sept – Commission confirms opening of proceedings ex. Art. 102 TFEU
Market partitioning
Restricting diversification of supply
Unfair prices
Current investigation, but politically sensitive

8. Thank you for your attention h.h.b.vedder@rug.nl8
Thank you for your attention