Federal Cartel Office: New abuse control proceeding relating to energy price relief measures in the power sector initiated | Fieldfisher
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Federal Cartel Office: New abuse control proceeding relating to energy price relief measures in the power sector initiated




After the German Federal Cartel Office (FCO, Bundeskartellamt) has already initiated examination proceedings against gas suppliers (the corresponding newsflash can be found here) and heat suppliers in May, it has now also initiated examination proceedings in the area of power supply. These proceedings concern energy suppliers who have applied for advance payments for the supply of electricity in accordance with the laws on energy price relief. The prohibitions of abusive practices in the respective laws aim to prevent companies from charging customers with prices which results in the companies obtaining unjustified relief payments from the state. A large number of suppliers may have violated these provisions.


Double-digit number of electricity suppliers affected

This third round of proceedings affects a double-digit number of electricity suppliers who have filed applications for advance payments under the energy price relief laws, according to Andreas Mundt, President of the FCO. "The suppliers in question include distributors belonging to large energy corporations, as well as municipal utilities, regional suppliers and also small discounters and suppliers with a focus on renewable energy."

Before the FCO initiated the proceedings in the power supply sector, it conducted an analysis of all application and reporting data from January 2023 to May 2023. Based on the evaluation of approx. 12,000 applications, the suppliers in question were identified. They will now be questioned in particular on their prices and costs as well as on their respective development over time.


One fifth of the relief sums affected

The sum for which proceedings have now been initiated represents around 20% of the total relief payments applied for by the suppliers for the supply of private households and small businesses, explains Mundt. Hence, about one fifth of all payments under the relevant laws capping the prices of electricity appear suspiciously high to the FCO. "Additionally, we are examining several suppliers that have claimed relief payments with regard to the supply of electricity to large customers which consume over 30,000 kWh per year", the FCO announced.


Individual consumers also potentially affected

According to the laws on energy price relief, customers that act as their own supplier – referred to as "other end consumers", notably industrial customers – can also claim relief payments. These transactions can also be examined by the FCO. So far, only a very small number of such industrial customers have made use of these relief payments. The FCO stated that it had initially only prioritised proceedings against electricity suppliers.


Legal implications

The price relief laws prohibit the exploitation of the rules which are meant to ease the financial burden on consumers (§ 39 StromPBG and § 27 EWPBG). In particular, this is to prevent a situation where energy suppliers could obtain higher statutory reimbursement payments by raising their base (end customer) prices for gas, heating or electricity without any objective justification resulting from increased costs.

If violations are found, unlawfully obtained compensation payments must be paid back to the electricity transmission system operators. The imposition of fines is also possible.



Since the beginning of the year, the electricity price has been capped at 40 cents per kilowatt hour for 80 percent of the previous year's consumption due to the laws on energy price relief. Suppliers can be reimbursed for higher prices by the state. The amount of the refund depends on the difference between the contractually agreed price and the price capped by the price relief laws. The FCO has been tasked with ensuring that the prices are not abusively set too high by the energy suppliers in this process.

From the beginning, there were concerns that reimbursement mechanisms could be exploited and prices above market value could be charged by the suppliers in order to obtain increased reimbursement payments from the government. In response, a new department was set up at the FCO to investigate potential violations. In mid-May, the authority initiated the first abuse proceedings against a number of gas suppliers in the double-digit range. At the end of May, investigations were initiated against district heat suppliers.

In contrast to abuse control under competition law, the FCO's intervention based on the energy price relief laws does not require companies to have a dominant position. If companies apply for reimbursement under the energy price relief laws, they are subject to the new abuse control provisions.



This third wave of investigations shows that the FCO is consistently and comprehensively pursuing possible subsidy abuse in the energy sector. It is to be expected that the FCO will initiate further investigation proceedings in the area of the laws on energy price relief, provided that the newly initiated proceedings show that excessive prices were indeed charged.

The outcome of the first wave of investigations is therefore of great interest to a large number of companies. In particular, it will be important to see whether and to what extent the FCO will impose fines for violations.



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