2005/801/EC: Commission Decision of 9 December 2004 declaring a concentration inc... (32005D0801)
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2005/801/EC: Commission Decision of 9 December 2004 declaring a concentration incompatible with the common market pursuant to Article 8(3) of the Council Regulation (EEC) No 4064/89 (Merger Regulation (ECMR)) (Case No COMP/M.3440 — EDP/ENI/GDP) (notified under document number C(2004) 4715) (Text with EEA relevance)
- COMMISSION DECISION
- of 9 December 2004
- declaring a concentration incompatible with the common market pursuant to Article 8(3) of the Council Regulation (EEC) No 4064/89 (Merger Regulation (ECMR))
- (Case No COMP/M.3440 — EDP/ENI/GDP)
- (notified under document number C(2004) 4715)
- (Only the English version is authentic)
- (Text with EEA relevance)
- (2005/801/EC)
- I. THE PARTIES
- II. THE OPERATION
- III. RELEVANT MARKET
- A. RELEVANT ELECTRICITY MARKET
- 1. RELEVANT PRODUCT MARKET
- Wholesale electricity
- Balancing power and ancillary services
- Transmission and distribution
- Retail supply of electricity
- 2. GEOGRAPHICAL MARKETS IN ELECTRICITY
- B. RELEVANT NATURAL GAS MARKETS
- 1. PRODUCT MARKET
- 2. GEOGRAPHICAL MARKET
- IV. COMPETITIVE ASSESSMENT
- A. ELECTRICITY MARKETS
- 1. WHOLESALE MARKET
- (a) EDP holds a dominant position on the wholesale market for electricity in Portugal
- (b) The operation will strengthen EDP’s dominant position, due to both horizontal and vertical effects
- Horizontal effects: removal of a significant competitor
- Non-horizontal effects: raising rivals’ costs
- Privileged and preferential access to the Portuguese gas infrastructure (Sines LNG terminal, import pipeline and Carriço underground storage)
- Ability to manage the constraints in the gas supply to CCGTs to the detriment of competing CCGTs
- Ability and incentive to control gas price and raise rivals’ costs, thereby foreclosing its actual and potential and deterring entry
- Access to proprietary information about EDP competitors’ costs, conferring it a significant advantage:
- Access to the daily gas nomination of its main proprietary information about its competitors’ costs, conferring it a significant advantage;
- 2. ANCILLARY SERVICES
- 3. RETAIL MARKETS FOR ELECTRICITY IN PORTUGAL
- (a) EDP holds a dominant position on the retail markets for electricity in Portugal
- (b) Strengthening of EDP’ dominant position on the retail market for electricity in Portugal
- B. GAS MARKETS
- 1. GDP HAS A DOMINANT POSITION ON THE PORTUGUESE GAS MARKETS
- 2. STRENGTHENING OF GDP’S DOMINANT POSITION ON THE PORTUGUESE GAS MARKETS
- (a) Gas supply to power producers (CCGTs)
- (b) Gas supply to LDCs (local distribution company)
- (c) Supply to gas to LICs (large industrial customers)
- (d) Gas supply to small customers
- V. COMMITMENTS PROPOSED BY THE NOTIFYING PARTIES
- VI. ASSESSMENT OF THE COMMITMENTS PROPOSED
- A. COMMITMENTS ON ELECTRICITY
- 1. WHOLESALE ELECTRICITY MARKET
- (a) Horizontal effects of the operation (removal of GDP as the most likely entrant)
- (b) Non-horizontal effects (raising rival costs)
- EDP’s privileged and preferential access to the Portuguese gas infrastructure
- Other vertical impacts of the merger
- 2. MARKET FOR ANCILLARY SERVICES
- 3. RETAIL SUPPLY OF ELECTRICITY
- B. NATURAL GAS MARKETS
- 1. GAS SUPPLY TO POWER PRODUCERS (CUSTOMER FORECLOSURE)
- 2. GAS SUPPLY TO LDCS (CUSTOMER FORECLOSURE)
- 3. GAS SUPPLY TO LARGE INDUSTRIAL CUSTOMERS (LICS)
- 4. GAS SUPPLY TO SMALL CUSTOMERS
- VII. LATE REMEDIES
- VIII. CONCLUSION
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