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Brussels, 22nd May 2008

Antitrust: Commission opens formal proceedings against Gaz de France concerning suspected gas supply restrictions

The European Commission has decided to open formal antitrust proceedings against the French gas company Gaz de France for a suspected breach of the EC Treaty's rules on abuse of dominant position (Article 82) and restrictive business practices (Article 81). The case arises out of inspections carried out in 2006 on Gaz de France premises in France (see MEMO/06/205). The Commission proceedings focus on behaviour which may prevent or reduce competition on supply markets for natural gas in France.

The initiation of proceedings does not imply that the Commission has proof of an infringement. It only signifies that the Commission will conduct an in-depth investigation of the case as a matter of priority.

Why has the Commission decided to initiate proceedings?

The initiation of proceedings against Gaz de France originates from information obtained during the inspection carried out in 2006.

The potential infringement consists of behaviour that might prevent or reduce competition on downstream supply markets for natural gas in France through, in particular, a combination of long-term reservation of transport capacity and a network of import agreements, as well as through underinvestment in import infrastructure capacity. These suspected practices, constituting possible infringements of Articles 81 and 82 of the EC Treaty and Articles 53 and 54 of the EEA Agreement, are allegedly engaged in by Gaz de France SA, its subsidiaries and companies under its control.

The proceedings against Gaz de France are not part of the energy sector competition inquiry, on which the final report was presented on 10th January 2007 (see IP/07/26 and MEMO/07/15). The energy sector inquiry has allowed the Commission to gain an in-depth understanding on the functioning, and in some respects mal-functioning, of the energy sector, which is of key importance for the overall competitiveness of the European economy. The knowledge acquired during the sector inquiry has allowed the Commission to draw conclusions as regards where Commission investigations based on competition law could be appropriate and effective.

There is no strict deadline to complete inquiries into anticompetitive conduct. Their duration depends on a number of factors, including the complexity of each case, the extent to which the undertakings concerned co-operate with the Commission and the exercise of the rights of defence.

What is the legal base for the decision?

The legal base of this procedural step is Article 11(6) of Council Regulation No 1/2003 and article 2(1) of Commission Regulation No 773/2004.

Article 11(6) of Regulation No 1/2003 provides that the initiation of proceedings relieves the competition authorities of the Member States of their authority to apply the competition rules laid down in Articles 81 and 82 of the Treaty. Moreover, Article 16(1) of the same Regulation provides that national courts must avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings that it has initiated.

Article 2 of Regulation No 773/2004 provides that the Commission can initiate proceedings with a view to adopting at a later stage a decision on substance according to Articles 7-10 of Regulation No 1/2003 at any point in time, but at the latest when issuing a statement of objections or a preliminary assessment notice in a settlement procedure. In the case at stake, the Commission has chosen to open proceedings before such further steps.

The Commission may make public the initiation of proceedings in any appropriate way. Before doing so, it informed the parties concerned. The Competition Authorities of the Member States concerned have also been informed.

The company's rights of defence will be fully respected.

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