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Brussels, 19 March 2009

Antitrust: Commission confirms sending Statement of Objections to ENI concerning the Italian gas market

The European Commission can confirm that it sent on 6 March a Statement of Objections under EU antitrust rules to the Italian ENI group. The Statement of Objections sets out the Commission's preliminary view that the management and operation of natural gas transmission pipelines by ENI may be in breach of EC Treaty rules on abuse of a dominant market position (Article 82). This behaviour concerns an alleged refusal to grant access to capacity available on the transport network (capacity hoarding), the granting of access in an allegedly less useful manner (capacity degradation) and an alleged strategic limitation of investment (strategic underinvestment) in ENI's international transmission pipeline system. These practices allegedly took place despite very significant short- and long-term demand from third party shippers. The Statement of Objections indicates that these practices may have weakened competitors on the market, and harmed customers in Italy.

ENI Spa is an Italian-state controlled company active at multiple levels of the production, transportation and supply chains in the energy sector. ENI is predominantly active in Italy where it is the largest producer, importer and supplier of natural gas on the wholesale and retail markets.

Following an investigation opened on the Commission's own initiative that included surprise inspections on company premises, the Commission opened formal proceedings on 20 April 2007 (see MEMO/07/187). The Statement of Objections focuses on the management and operation of ENI's transmission pipelines allowing the import of natural gas from delivery points in Austria (TAG pipeline) and Germany (TENP/Transitgas pipelines) to Italy.

The recent gas crisis has shown that access to gas infrastructure in Europe is a requirement for market integration and the development of competition plays a crucial role in assuring the security of gas supply. The alleged hoarding and degrading of capacity by ENI and in particular the alleged deliberate limitation of investments in capacity (strategic underinvestment) on transport networks are not only considered in breach of EC Treaty rules on abuse of a dominant market position but also negatively impact the security of gas supply in Italy as it creates a bottleneck on import capacity.

Security of supply is likely to be negatively affected by limited investments in transport capacity and by a lack of more suppliers on the market increasing the dependence on any single supplier and its particular contracts with the upstream provider.

Competition has a positive effect on security of supply as unrestricted access to an efficient interconnected supply network with sufficient capacity and reliable price signals is essential to respond effectively to a supply crisis.

Procedural background

A Statement of Objections is a formal step in Commission antitrust investigations in which the Commission informs the parties concerned in writing of the objections raised against them. The addressee of a Statement of Objections can reply in writing to the Statement of Objections, setting out all facts of relevance to its defence against the objections raised by the Commission. The party may also request an oral hearing to present its comments on the case. The Commission may then decide whether conduct addressed in the Statement of Objections is compatible or not with the EC Treaty’s antitrust rules. Sending a Statement of Objections does not prejudge the final outcome of the procedure.

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