CN06 - French Competition Authority fines EDF EUR 300 million for abuse of dominance

The French Competition Authority ("FCA") has fined Électricité de France ("EDF") EUR 300 million for taking advantage of its dominant position as public provider of regulated electricity tariffs. It was found that EDF engaged in conduct with the objective of maintaining its market share in the electricity supply sector and to strengthen its position in the related gas and energy services markets in France. EDF did not contest the decision and offered a series of commitments to the FCA as part of an agreed settlement procedure. 

Key takeaways

• Undertakings in dominant positions cannot take advantage of the control they possess over assets which cannot be re-produced by new entrants in order to preserve their market share position and inhibit the development of competition.
• Importantly, information collated in a database reflecting a long history of dealings with a large volume of consumers can constitute an asset incapable of reproduction. Accordingly, careful regard must be had to how a dominant entity in possession of that data uses it to protect its dominance.
• In this case the FCA accepted a commitment from EDF to make the non-reproduceable data in its possession accessible to competing electricity suppliers in a bid to level the playing field and encourage greater competition in the electricity supply market.

Background

The supply of electricity pursuant to a regulated electricity tariff is a public service obligation to which EDF is subject in France. Regulated tariffs for medium and large non-domestic customers ("green" and "yellow" tariffs) were removed in 2016, while regulated tariffs for domestic and small non domestic customers ("blue" tariffs) remain in place. EDF's conduct, found to have constituted an abuse of its dominant position, took place between 2004 and 2021 during a period where regulation of the energy sector (through these tariff structures) was relaxing, and new entrants were entering the market. During this period, while EDF was required to offer a fixed electricity price set by regulation, customers could look to acquire electricity and other energy services from new entrants on the market, free to set their own prices. 

FCA findings 

On 22 February 2022, the FCA published a decision against EDF finding that EDF:

• held a dominant position in the market for the supply of electricity to residential and non-residential customers in France; and
• abused that position, by using the means at its disposal as a regulated tariff operator (including access to customer data and certain commercial infrastructure dedicated to the management of customer contracts for the sale of electricity at regulated prices) to:
  • promote the marketing of its own gas market offers and energy services;
  • create confusion amongst consumers between the marketing of regulated tariffs and non-regulated market offers;
  • take advantage of it position as incumbent electricity provider to a large number of customers benefiting from electricity supply at regulated tariffs to maintain its market share in the electricity supply sector; and
  • knowingly make available to alternative (competing) suppliers an incomplete database of customers at regulated tariffs.

It was found that EDF did this with the objective of maintaining its market share in the electricity supply sector and to strengthen its position in the related gas and energy services markets.

Penalties

By electing not to contest the facts and findings against it and opting for a settlement procedure, EDF was able to reach a settlement resulting in a:

• penalty of EUR 300 million; and
• two sets of commitments, binding for a period of three years:
  • the first, to make its "blue" tariff customer files available to alternative electricity suppliers requesting access, including anonymised data relating to all "blue" tariff customers, individual data relating to "blue" tariff non-residential customers and residential customers (subject to customer consent); and
  • the second, to separate its subscription process for customers interested in offers at the regulated price and customers interested in offers at market prices.

With thanks to Hélène Fricaudet and Eva Murguet of Ashurst for their contribution.