The Italian Competition Authority opens an Article 102 TFEU investigation into the gas market against ENI

By a decision taken on 6 March 2012 the Italian Competition Authority (ICA) has opened an Article 102 TFEU investigation against ENI (Case A440), the dominant undertaking in the Italian gas market. The ICA believed that the ENI commercial conduct would amount to hoarding capacity, thereby harming its industrial customers.

ENI owns the majority of primary capacity for the Transitgas and TAG gas pipelines, which link the North-European spot gas markets, namely the TTF and ZEE, to Italy. Regularly each year ENI organized auctions for allocate secondary capacity for these pipelines to interested third parties. Gas Intensive Società Consortile (GI), a joint-venture regrouping more than 300 firms that need large amount of gas, the so-called industrial customers filed a complaint with the ICA, indicating that since April 2011 ENI would have changed its commercial policy. Indeed, GI complained that, contrary to what it used to do, ENI refused to offer its secondary capacity on the Transitgas and TAG gas pipelines for the thermal year 2011-12. ENI motivated the refusal as it was necessary to ensure compliance with its take or pay contracts. In that regard, the ICA noticed that ENI had underutilized capacity on the pipelines and that GI had formally declared its intention to purchase the available capacity.

According to the ICA the contested ENI conduct is liable to affect the market for the international shipping of gas to Italy through the Transitgas and TAG pipelines and the market for the gas supply to industrial customers. What the ICA thinks is that the ENI refusal may be considered as an exclusionary and exploitative abuse to the detriment of vertically integrated operators that autonomously buy their gas requirement. The Transitgas and TAG pipelines are important facilities for these operators. Access to capacity on these pipelines allows them to ship to their Italian plants the gas supplies they bought at the North-European spot gas markets, which are liquid markets where gas is traded at low prices. Indeed, it should be borne in mind that industrial customers could buy their gas requirements at the TTF and ZEE markets at lower prices than in Italy. However, the ENI decision to withhold capacity may be liable to frustrate the intention of industrial customers to procure their gas requirements from these markets. The ENI conducts is also thought to led to exploitative effects in the shape of the higher price that the gas shipper is in position to impose on industrial customers to which access to the gas pipelines has been denied.

The ICA has to conclude investigation within the deadline of 15 March 2013.

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