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Energy Law & Policy Workshop
Decentralised Energy Law Enforcement
Commitments monitoring: the ENI case
30 October 2014, Florence
Pier Luigi Parcu
Director of Communications & Media
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Plan of the presentation
1.Commitments decisions
2.The ENI case
3.The role of the Monitoring Trustee
4.Some conclusions
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Very General Disclaimer
This is really a personal, almost anecdotal view of the
commitments decisions, the ENI case and especially
the role played by the Monitoring Trustee
Having being personally the Monitoring Trustee of the
case (with my team of Studio Economico Parcu e
Associati) jointly with Stefano Bianchi (with his team of
Mazars Spa) I have also limitations due to the 10 year
term of the confidentiality agreement.
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Commitments decisions
When the European Commission decides to pursue an
antitrust case, it may take a commitment decision based on
Article 9 of Regulation 1/2003.
That provision allows companies to offer commitments that
are intended to address the competition concerns identified
by the Commission.
If the Commission accepts these commitments it adopts a
commitment decision making them binding on the parties
without, however, establishing an infringement.
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Commitments decisions
The procedure should give practical results
Save administrative time and resources
Fully remove the original competitive worries
Pursue solutions that are timely, easy to monitor,
and that do not require a long term enforcement
effort from the side of the Commission
The possibility to establish a Monitoring Trustee is a
compromise between minimizing Commission direct
enforcement and realism…
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The ENI case
ENI is/was the incumbent gas company in Italy (including storage
activities) and operator of the Italian gas transmission system (TSO,
through its then subsidiary Snam Rete Gas)
ENI also controlled the international gas import infrastructures into
Italy
The case concerned a refusal to supply
– in the form of capacity hoarding, capacity degradation and
strategic limitation of investment on international transmission
pipelines importing gas into Italy
– leading to the foreclosure of competitors and harm for
competition and customers in one or more supply markets in Italy
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The ENI case
Procedure:
Inspections in May 2006
Proceedings opened in April 2007
Statement of Objections (SO) addressed to ENI on
6.3.2009 (200+ pages…)
Decision accepting ENI’s commitments 29.9.2010
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The ENI case
Eni was charged
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The ENI case
THE MARKET FOR TRANSPORT OF GAS TO ITALY
The transport of natural gas to Italy is a distinct activity and instrumental to
the wholesale/retail supply activity:
– Demand side: need to have access to viable transportation capacity to compete
in downstream markets
– Supply side: no alternative routes to ENI’s that could be considered
interchangeable or substitutable by the consumer (shippers) due to their
characteristics, prices and effective use
ENI's dominance based on its ownership /transportation rights on viable
import routes to Italy
– ENI has exclusive /joint control over TSOs and holds beneficial use rights over all
pipelines: 89% on TAG; 73% on TENP and 98% on Transitgas
– ENI's dominant position after 2009 remains indisputable, its market share still
being 55‐60%
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The ENI case
THE ALLEGED VIOLATIONS OF ART. 82 CE
ENI put in place a strategy aimed at foreclosing the access of
competitors to the Italian downstream markets by keeping
transport capacity tight
This constitutes a refusal to supply taking various forms
– capacity hoarding
– capacity degradation
– strategic limitation of investments
The abusive conduct results from the conflict of interest of the
vertically integrated operator that seeks to preserve its
downstream margins by limiting the access to an essential
infrastructure
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Remedies
Infringement was on going
Risk of repeated infringement
Regulatory framework is not a substitute for
remedies in a competition case
Divestiture of ENI’s shares in the TSOs could
effectively addresses the competition concerns
No equally effective “behavioural” remedies
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Commitments
ENI proposed commitments had the structural
element of divesture of TSO’s business in TAG,
TEMP and TRANSITGAS
This required the sale of 5 companies and assets
in Austria, Germany and Switzerland
This divesture process implied preservation and
correct use of the assets in the meantime and sale
to an acceptable buyer
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The Role of the Monitoring Trustee
The role of the Monitoring Trustee was to ensure
a non anti‐competitive strategic management and
supervise the ordinary management of the assets
in the interim period
The Monitoring Trustee had also a specific
advisory role in the process of sale, finalized to
help the Commission to assess the “competitive”
adequacy of the buyer
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Conclusion
In the end this is a success story for the Commission
The management of the assets in the around 2 years from
decision to divestment was flawless and the divesture was
timely, as designed in the commitments and to an
acceptable buyer
Reality ex‐post changed with ENI sale of SNAM, the Italian
storage and pipeline subsidiary, imposed by the Italian
Government, what probably could have avoided the
divesture altogether…
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Thank you for the attention!
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