On March 6, 2020, the Commission approved commitments presented by Transgaz, the state-owned operator of Romania’s natural gas transmission system, to address alleged restrictions on gas exports from Romania.[1]
The Commission claimed Transgaz had abused its dominant position by restricting exports of natural gas from Romania by: (1) underinvesting in or delaying infrastructure for gas exports; (2) imposing interconnection tariffs that made exports commercially unviable; and (3) using technical pretexts to prevent or delay exports. Such practices potentially hindered the free flow of natural gas from Romania to Hungary and Bulgaria, and presented barriers to cross-border competition in the supply of energy resources in an integrated Energy Union.
To address the Commission’s concerns, Transgaz gave various undertakings to facilitate gas exports. Specifically, Transgaz committed to ensure minimum export capacities of 1.75 and 3.7 billion cubic meters per year at Romania’s interconnection points with Hungary and Bulgaria respectively (as shown in the figure below). Transgaz also committed to ensure no discrimination between export and domestic tariffs and to refrain from using any other activities hindering exports. These commitments are to apply for six years, until December 31, 2020.
Source: European Commission Press Release
The present decision is the latest in a series of Commission enforcement actions aimed at achieving an internal energy market. It follows commitment decisions involving other gas and energy operators, from: (i) TenneT to increase the capacity of the Germany-West Denmark electricity interconnector,[2] (ii) Gazprom to remove contractual restrictions and adopt mechanisms to integrate gas markets in Central and Eastern European Member States,[3] and (iii) Bulgarian Energy Holding to remove destination clauses in wholesale gas contracts, to set up a new power exchange, and to guarantee minimum volumes on the exchange.[4]
These cases affirm that unilateral conduct which gives rise to market partitioning can constitute violations of Article 102 TFEU, in a similar manner to export bans which are treated strictly under Article 101 TFEU.[5] In resolving these cases through commitments, the Commission is able to secure investments in new infrastructure, potentially going further than what could have been achieved through a prohibition decision. These enforcement activities support the EU’s objectives to establish an Energy Union in order to secure more competitive energy prices, enhance security of supply, and to contribute to its long- term climate action strategy.
[1] Romanian gas interconnectors (Case COMP/AT.40335), decision not yet published. Commission Press Release IP/20/407, “Antitrust: Commission accepts commitments by Transgaz to facilitate natural gas exports from Romania,” March 6, 2020.
[2] DE/DK Interconnector (Case COMP/AT.40461), Commission decision of December 7, 2019, as reported in our February 2019 EU Competition Law Newsletter.
[3] Upstream gas supplies in Central and Eastern Europe (Case COMP/AT.39816), Commission decision of May 24, 2018.
[4] BEH Electricity (Case COMP/AT39767), Commission decision of December 10, 2015.
[5] See the Commission’s decisions fining Nike and Guess for imposing territorial restrictions in their distribution agreements for consumer goods, as reported in our March 2019 EU Competition Law Newsletter, and December 2018 EU Competition Law Newsletter, respectively. See also, the Commission’s decision to accept commitments from Sky and certain US studios on cross-border sales of Pay-TV services, also reported in our March 2019 EU Competition Law Newsletter, and the Commission’s decision fining AB InBev for restricting beer sales between Belgium and the Netherlands, reported in our May 2019 EU Competition Law Newsletter.