CN06 - French Competition Authority fines EDF EUR 300 million for abuse of dominance
19 April 2022
19 April 2022
The French Competition Authority ("FCA") has fined Électricité de France ("EDF") EUR 300 million for taking advantage of its dominant position as public provider of regulated electricity tariffs. It was found that EDF engaged in conduct with the objective of maintaining its market share in the electricity supply sector and to strengthen its position in the related gas and energy services markets in France. EDF did not contest the decision and offered a series of commitments to the FCA as part of an agreed settlement procedure.
Key takeaways
- Undertakings in dominant positions cannot take advantage of the control they possess over assets which cannot be re-produced by new entrants in order to preserve their market share position and inhibit the development of competition.
- Importantly, information collated in a database reflecting a long history of dealings with a large volume of consumers can constitute an asset incapable of reproduction. Accordingly, careful regard must be had to how a dominant entity in possession of that data uses it to protect its dominance.
- In this case the FCA accepted a commitment from EDF to make the non-reproduceable data in its possession accessible to competing electricity suppliers in a bid to level the playing field and encourage greater competition in the electricity supply market.
The supply of electricity pursuant to a regulated electricity tariff is a public service obligation to which EDF is subject in France. Regulated tariffs for medium and large non-domestic customers ("green" and "yellow" tariffs) were removed in 2016, while regulated tariffs for domestic and small non domestic customers ("blue" tariffs) remain in place. EDF's conduct, found to have constituted an abuse of its dominant position, took place between 2004 and 2021 during a period where regulation of the energy sector (through these tariff structures) was relaxing, and new entrants were entering the market. During this period, while EDF was required to offer a fixed electricity price set by regulation, customers could look to acquire electricity and other energy services from new entrants on the market, free to set their own prices.
On 22 February 2022, the FCA published a decision against EDF finding that EDF:
It was found that EDF did this with the objective of maintaining its market share in the electricity supply sector and to strengthen its position in the related gas and energy services markets.
By electing not to contest the facts and findings against it and opting for a settlement procedure, EDF was able to reach a settlement resulting in a:
With thanks to Hélène Fricaudet and Eva Murguet of Ashurst for their contribution.
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.