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Energy Liberalization in Antitrust Straitjacket: A Plant Too Far?


Malgorzata M. Sadowska


University of Bologna

April 10, 2011

World Competition: Law and Economics Review, Vol. 34, No. 3, September 2011

Abstract:     
The European Commission has launched a number of antitrust investigations against the major energy incumbents in the aftermath of the energy sector inquiry. Most of them have already been settled under Article 9 of the EC Regulation 1/2003 and the undertakings offered far-reaching, sometimes structural, commitments. This article studies the 2008 investigation into price manipulation in the German electricity wholesale market. In spite of no convincing evidence and flaws in the assessment, the Commission was able to negotiate from E.ON substantial capacity divestments.

The Commission is straightforward about using antitrust rules to open up energy markets. Sector inquiries, commitment procedure and structural remedies allow for a quick intervention, flexible problem-solving and bring about decisive changes in the energy market setting. However, harnessing antitrust for the purpose of energy liberalization policy has an adverse impact on competition enforcement itself. First, it leads to a number of ‘weak’ cases, based on far-fetched arguments. Second, it results in remedies which are not tailored to the abuse at issue, but are in line with a wider objective of energy market liberalization, and as an outcome of negotiations, further swayed by the firm’s own interest in the ultimate shape of the commitment package.

Number of Pages in PDF File: 26

Keywords: competition policy, antitrust, commitment decisions, remedies, energy, electricity wholesale markets, power exchange, capacity withholding, E.ON

JEL Classification: K20, K21, L10, L11, L13, L41, L43, L94

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Date posted: April 12, 2011 ; Last revised: July 2, 2012

Suggested Citation

Sadowska, Malgorzata M., Energy Liberalization in Antitrust Straitjacket: A Plant Too Far? (April 10, 2011). World Competition: Law and Economics Review, Vol. 34, No. 3, September 2011. Available at SSRN: http://ssrn.com/abstract=1806530

Contact Information

Malgorzata M. Sadowska (Contact Author)
University of Bologna ( email )
Piazza Scaravilli 2
Bologna, 40100
Italy
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