European Commission Slaps Two European Energy Giants With Huge Fines

The European Commission, the European Union body responsible for enforcing competition law, has imposed antitrust-related fines of nearly $800 billion on both Eon and GdF Suez.

The Commission said that the two energy giants -- Eon, a German firm, and GdF Suez, a French firm -- violated EU antitrust measures by agreeing not to sell natural gas in each other's home markets over a jointly built gas pipeline. The market-sharing agreement continued even after European gas markets were liberalized.

Why, you might ask, is this news item part of the blog? Simply because it indicates that in some markets -- the EU in this instance -- energy companies can find themselves being aggressively pursued by antitrust authorities. Put another way, finding, extracting, and transporting the energy are not the only issues that need to be considered in a business context. 

The combined $1.6 billion fine was the first of its kind levied by the Commission for an antitrust infringement in the EU energy sector.

Neelie Kroes, the EU Competition Commissioner, said:

"This decision sends a strong signal to energy incumbents that the Commission will not tolerate any form of anticompetitive behavior. Marketing sharing is one of the worst types of antitrust infringement. This agreement deprived customers of more price competition and more choice of supplier in two of the largest gas markets in the EU."

Both companies said they will appeal the Commission's decision.