The European Commission has decided to open anti-trust proceedings against the Italian energy company ENI. The case arises out of the inspection carried out in 2006 on ENI premises and premises of ENI subsidiaries in Italy, Austria and Germany (see MEMO/06/205). The Commission proceedings focus on behaviour by the ENI Group which it suspects may have been aimed at exclusion of potential competitors from Italian gas supply markets (i.e. so-called market foreclosure).

What is the decision of the Commission to initiate proceedings about?

The initiation of proceedings against ENI originates from information obtained during the inspection carried out in 2006.

The alleged infringement which will be further investigated takes the form of capacity hoarding and strategic underinvestment in the transmission system leading to the foreclosure of competitors and harm for competition and customers in one or more supply markets in Italy. These suspected practices, constituting possible infringements of Article 82 of the EC Treaty, are allegedly engaged in by ENI S.p.A. and by its subsidiaries and companies under their control, including Trans Austria Gasleitung GmbH, Trans Europa Naturgas Pipeline GmbH & Co. KG, ENI Deutschland S.p.A. and Eni Gas Transport International SA.

The proceedings against ENI Group are not part of the energy sector competition inquiry, on which the final report was presented on 10^th January 2007 (see IP/07/26 and MEMO/07/15). The energy sector inquiry has allowed the Commission to gain an in-depth understanding on the functioning, and in some respects mal-functioning, of the energy sector, which is of key importance for the overall competitiveness of the European economy. The knowledge acquired during the sector inquiry has allowed the Commission to draw conclusions as regards where Commission investigations based on competition law could be appropriate and effective.

It is important to note that the initiation of proceedings does not imply that the Commission has conclusive proof of an infringement. It only signifies that the Commission will conduct an in-depth investigation of the case as a matter of priority.

There is no strict deadline to complete inquiries into anticompetitive conduct. Their duration depends on a number of factors, including the complexity of each case, the extent to which the undertakings concerned co-operate with the Commission and the exercise of the rights of defence.

What is the legal base for the decision?

The legal base of this procedural step is Article 11(6) of Council Regulation No 1/2003 and article 2(1) of Commission Regulation No 773/2004.

Article 11(6) of Regulation No 1/2003 provides that the initiation of proceedings relieves the competition authorities of the member states of their authority to apply Articles 81 and 82 of the Treaty. Moreover, Article 16(1) of the same Regulation provides that national courts must avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings that it has initiated.

Article 2 of Regulation No 773/2004 provides that the Commission can initiate proceedings with a view to adopting at a later stage a decision on substance according to Articles 7-10 of Regulation No 1/2003 at any point in time, but at the latest when issuing a statement of objections or a preliminary assessment notice in a settlement procedure. In the case at stake, the Commission has chosen to open proceedings before such further steps.

The Commission may make public the initiation of proceedings in any appropriate way. Before doing so, it has to inform the parties concerned. The Competition Authorities of the Member States concerned have also been informed.

The company’s rights of defence will be fully respected.