Neelie Kroes Commission welcomes ENI's structural remedies proposal to increase competition in the Italian gas market Press point with Mr Paolo Scaroni, Chief Executive Officer of ENI Brussels, 4th February 2010
European Commission - SPEECH/10/19 04/02/2010
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European Commissioner for Competition Policy
Commission welcomes ENI's structural remedies proposal to increase competition in the Italian gas market
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Press point with Mr Paolo Scaroni, Chief Executive Officer of ENI
Brussels, 4th February 2010
Ladies and gentlemen,
Today, I can announce that the Commission has accepted to market test another proposal for commitments to improve competition in the energy sector, this time in relation to the major Italian gas supplier ENI. I consider these proposals as a very positive step forward. Subject to a successful result of the market test, the Commission will take a final decision accepting them and making them legally binding on ENI.
The ENI case was launched in the wake of the energy sector inquiry, following concerns that ENI's behaviour was blocking competitors' access to the transport infrastructure needed to import gas into Italy to the detriment of consumers. The Commission was concerned that in doing so, ENI could be in breach of EU rules on abuse of a dominant market position.
F ollowing surprise inspections on company premises, proceedings were opened in May 2007 .
Today, ENI submitted a comprehensive set of commitments that have the clear potential of addressing the Commission's competition concerns. In fact ENI proposes structural remedies that effectively mean the full divestiture of all of ENI's shares in all gas transport pipelines where we had competition concerns. This is the Commission's 8th major antitrust case in the energy sector and the third case where structural remedies have been submitted.
Why do structural remedies appear to be necessary?
Our concerns were that ENI in particular hoarded pipeline capacity and deliberately underinvested in transport capacity despite significant demand from third party shippers.
These concerns directly flowed from the conflict of interests that ENI was facing. Any incentive for ENI, as operator of the transport pipelines, to make additional profits from transporting more gas on its pipelines was more than outweighed by the incentive for ENI to maximise its profits from selling gas to customers on the Italian wholesale market by reducing access to that market for potential competitors.
I therefore very much welcome the structural remedies submitted by ENI to divest its shares in the three pipelines submitted to the investigation, i.e. TAG, TENP and Transitgas.
A structural solution indeed appears necessary to address the competition concerns and allow a proper operation and management of the gas transit pipelines in line with market demand.
These remedies have the potential to improve access to the Italian gas markets and contribute to an integrated and competitive single European energy market. This is, of course, what we need in order to provide a secure supply of energy at affordable prices.
In other words, this case fits perfectly with what I have strived to achieve in the energy field during my mandate as Competition Commissioner. Our competition energy sector inquiry pointed to serious malfunctioning of energy markets. The fact that we have brought forward so many major antitrust cases shows our concerns were justified. We have acted resolutely to pursue a competitive and integrated single European energy market that works to the benefit of European consumers, both companies and individual households.
I firmly believe that these efforts are a significant contribution to Europe's strategic goal of secure, affordable and greener energy and I can assure you that there is still more to come!