Geoplin abused its Dominant Position on the Market of Gas Supply by Prohibited Contractual Clauses

Press release

Slovenian Competition Protection Agency (CPA) concluded that Geoplin, incumbent gas importer and supplier in the Republic of Slovenia, abused its dominant position on the market of gas supply to large industrial customers. Therefore, on 5 January 2015 the decision was notified to Geoplin, requiring Geoplin to cease violations and take the necessary measures. Geoplin shall report in writing to CPA on the adopted measures.

 

Industrial customers Slovenia were, due to long-term contracts, obliged to purchase the gas at appreciably higher prices and after the CPA's decision the market of gas supply is expected to be fully liberalized. Thus, it is expected that Slovenian Industry will become more competitive and successful in the international economic area.  Following lower prices for the industry, downward pressure on consumer prices can also be expected.

 

CPA established that Geoplin abused its dominant position predominantly by concluding long-term contracts with industrial customers connected to the transmission network. These long-term contracts included contracted quantities of gas to be taken over for the whole contract period as also obligation to take delivery of minimum quantities. Penalties and other fees were also set out in the long-term contracts for the quantities that have not been taken over, whereby preventing the industrial customers the right to use the surplus quantities or to be resold. Therefore industrial customers connected to the transmission network were entirely tied to Geoplin.

 

In order to prevent further infringements of competition rules as also to ensure effective redress of infringements, Geoplin may autonomously and at its own choice take the necessary measures, including the corresponding adjustments of still valid long-term contracts. Geoplin shall report to CPA in witting on the adopted measures.

 

CPA is convinced that Geoplin will remove the prohibited clauses from the concluded long-term contracts with industrial customers. Failure to give effect, within the prescribed period, to the CPA's Decision represents an autonomous offence punishable under penalty of a fine up to 10 % of the annual turnover of the undertaking involved.

 

In the preparation of the decision CPO followed the established practices, including practices of European Commission (example: Commission Decision of 21 January 1998, Case IV/35.814 - Alloy surcharge, OJ No. L 100 of 1 April 1998, P 0055 – 0071).

 

 

 

 

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