On March 16, 2021, the Commission announced the opening of a formal investigation into Public Power Corporation (“PPC”), the largest wholesale and retail electricity supplier in Greece, and majority-owned by the Greek State, for allegedly abusing its dominance in the Greek wholesale electricity sector through predatory pricing strategies arising from its bidding behavior.[1]

PPC controls all of Greece’s lignite and hydroelectric power plants as well as some natural gas plants and renewable energy installations. PPC also owns the electricity distribution network in Greece, supplying electricity to retail and business customers, through its wholly-owned subsidiary, the Hellenic Electricity Distribution Network Operator.

The Commission alleges that PPC may have abused its dominant position in the Greek wholesale electricity market through predatory bidding behavior, preventing other market players from competing effectively in the Greek wholesale and related electricity markets.

Predatory pricing comprises a dominant undertaking reducing prices below cost to exclude, or marginalize, a competitor (whether actual or potential) and then significantly raising its prices again to recoup its losses from the predation phase, thereby harming consumers.[2] Predatory pricing cases are rare. They are challenging for antitrust authorities because competition law supports low prices and dominant firms also have the right to compete on price.

Hence, there is a fine line between encouraging price competition and evidencing and condemning exclusionary predatory pricing. In fact, the Commission’s 2019 Qualcomm decision[3] was the only Commission decision fining an undertaking for predatory pricing since its Wanadoo decision in 2003.[4] Some Member States, however, have also adopted predatory pricing decisions in recent years including in the pharmaceutical,[5] milk supply,[6] railway,[7] and energy[8] sectors.

But this investigation seems to be more than just another predatory pricing case. Commissioner Vestager said that PPC’s conduct might have “slowed down investment into the generation of greener energy.” In the context of the European Green Deal[9] and Greece’s pledge to phase out power generation from lignite by 2028,[10] the Commission’s focus on removing hurdles from the path of a climate-neutral Europe is not surprising. This is an example where the Green Deal seems to play a role regarding enforcement priorities.

The investigation comes almost simultaneously with the opening of a separate Commission investigation into EPEX Spot SE for possible anticompetitive behavior related to electricity intraday trading facilitation services. In the press release accompanying the opening decision, Commissioner Vestager stressed the importance of renewable technologies in the electricity mix.[11] It remains to be seen to what extent the Green Deal may also play a role in the Commission’s competitive assessment.

[1] Commission Press Release IP/21/1205, “Antitrust: Commission opens investigation into PPC’s behaviour in the Greek wholesale electricity market,” March 16, 2021, available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1205.

[2] See AKZO Chemie BV v. Commission (Case C-62/86) EU:C:1991:286, paras. 70–72; and Tetra Pak International SA v. Commission (Tetra Pak II) (Case C-333/94) EU:C:1996:436, para. 44.

[3] Qualcomm (predation) (Case COMP/AT.39711), Commission decision of July 18, 2019, as reported in our July 2019 European Competition Law newsletter. A related action for annulment is currently pending before the General Court in Qualcomm v. Commission (Case T-671/19).

[4] Wanadoo Interactive (Case COMP/AT.38233), Commission decision of July 16, 2003. See also the discussion on predatory pricing cases in the context of the Statement of Objections to České dráhy for alleged predatory pricing, as reported in our November 2020 European Competition Law newsletter.

[5] Austrian Federal Competition Authority, “Merck Sharp & Dohme GmbH and AFCA reach agreement before the Cartel Court on commitments to end proceedings on abuse of a dominant position in relation to the sale of a Temozolomide drug,” April 6, 2021, available at: https://www.bwb.gv.at/en/news/detail/ news/merck_sharp_dohme_gmbh_and_afca_reach_agreement_before_the_cartel_court_on_commitments_to_end_proc/.

[6] Valio (Case No. 2553/3/14), Finnish Supreme Administrative Court, December 29, 2016.

[7] Netherlands Authority for Consumers and Markets, “Dutch Railways NS abused its dominant position in regional tender process,” June 29, 2017, available at: https://www.acm.nl/en/publications/publication/17397/Dutch-Railways-NS-abused-its-dominant-position-in-regional-tender-process. The decision was annulled in 2019 by the District Court of Rotterdam.

[8] Engie, Décision 17-D-16, French Competition Authority, September 7, 2017.

[9] Competition Policy contributing to the European Green Deal – Call for contributions, October 13, 2020; Results of the Call for contributions, January 20, 2021; and Conference on Competition Policy contributing to the European Green Deal, February 4, 2021, available at: https://ec.europa.eu/competition/ information/green_deal/index_en.html#:~:text=The%20European%20Green%20Deal%20aims,resource%2Defficient%20and%20competitive%20economy.&text=Competitive%20markets%20encourage%20firms%20to,adopt%20more%20energy%2Defficient%20technologies. The Commission’s call for contributions on the “Competition Policy Supporting the Green Deal” was discussed in our October 19, 2020 Alert Memorandum.

[10] Hellenic Republic, National Energy and Climate Plan, December 2019, available at: https://ec.europa.eu/energy/sites/default/files/el_final_necp_main_en.pdf.

[11] Commission Press Release IP/21/1523, “Antitrust: Commission opens investigation into possible anticompetitive behaviour by the power exchange EPEX Spot,” March 30, 2021, available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1523.